U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

39–006

" HOUSE OF REPRESENTATIVES ! 108TH CONGRESS

2d Session 

REPORT

2005

108–802

Union Calendar No. 487

REPORT ON THE ACTIVITY

OF THE

COMMITTEE ON FINANCIAL SERVICES

FOR THE

ONE HUNDRED EIGHTH CONGRESS

JANUARY 3, 2005.—Committed to the Committee of the Whole House on 

the State of the Union and ordered to be printed


E:\Seals\Congress.#13
(III)

LETTER OF TRANSMITTAL 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, DC, January 3, 2005. 

Hon. JEFF TRANDAHL, 

Clerk, United States House of Representatives, 

Washington, DC. 

DEAR MR. TRANDAHL: Pursuant to clause 1(d) of rule XI of the 

Rules of the House of Representatives for the 108th Congress, I 

present herewith a report on the activity of the Committee on Financial Services for the 108th Congress, including the Committee’s 

review and study of legislation within its jurisdiction, and the oversight activities undertaken by the Committee. 

Sincerely, 

MICHAEL G. OXLEY, 

Chairman. 

(V)

C O N T E N T S 

Page 

Letter of Transmittal ............................................................................................... III 

Jurisdiction ............................................................................................................... 1

Rules of the Committee ........................................................................................... 4

Membership and Organization ............................................................................... 17

Legislative and Oversight Activities ...................................................................... 23

Full Committee ........................................................................................................ 25

Subcommittee on Capital Markets, Insurance, and Government Sponsored 

Enterprises ........................................................................................................... 49

Subcommittee on Domestic and International Monetary Policy, Technology, 

and Economic Growth .......................................................................................... 69

Subcommittee on Financial Institutions and Consumer Credit .......................... 87

Subcommittee on Housing and Community Opportunity .................................... 101

Subcommittee on Oversight and Investigations .................................................... 121

Oversight Plan for the 108th Congress .................................................................. 129

Implementation of the Oversight Plan for the 108th Congress ........................... 149

Appendix I—Committee Legislation ...................................................................... 175

Appendix II—Committee Publications ................................................................... 179

Union Calendar No. 487

108TH CONGRESS REPORT " HOUSE OF REPRESENTATIVES ! 2d Session 108–802

REPORT ON THE ACTIVITY OF THE COMMITTEE ON 

FINANCIAL SERVICES FOR THE 108TH CONGRESS 

JANUARY 3, 2005.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. OXLEY, from the Committee on Financial Services, 

submitted the following 

R E P O R T

Clause 1(d) of rule XI of the Rules of the House of Representatives for the 108th Congress requires that each standing committee, not later than January 2 of each odd-numbered year, submit to the House a report on the activities of that committee, including separate sections summarizing the legislative and oversight 

activities of that committee during that Congress. 

JURISDICTION 

RULES OF THE HOUSE

Clause 1(g) of rule X of the Rules of the House of Representatives 

for the 108th Congress sets forth the jurisdiction of the Committee 

on Financial Services as follows— (1) Banks and banking, including deposit insurance and Federal monetary policy. 

(2) Economic stabilization, defense production, renegotiation, 

and control of the price of commodities, rents, and services. 

(3) Financial aid to commerce and industry (other than 

transportation). 

(4) Insurance generally. 

(5) International finance. 

(6) International financial and monetary organization. 

(7) Money and credit, including currency and the issuance of 

notes and redemption thereof; gold and silver, including the 

coinage thereof; valuation and revaluation of the dollar. 

(8) Public and private housing. 

(9) Securities and exchanges. 

2

1The version of the memorandum printed in the January 20, 2001 Congressional Record contained a typographic error. A corrected version of the memorandum, which appears below, was 

printed in the January 30, 2001 edition of the Congressional Record.

(10) Urban development. 

MEMORANDUM OF UNDERSTANDING

The Committee on Financial Services was established when the 

House agreed to H. Res. 5, establishing the Rules of the House of 

Representatives for the 107th Congress, on January 3, 2001. The 

jurisdiction of the Committee on Financial Services consists of the 

jurisdiction granted the Committee on Banking and Financial Services in the 106th Congress, along with jurisdiction over insurance 

generally and securities and exchanges, matters which had previously been within the jurisdiction of the Committee on Commerce 

in the 106th and previous Congresses. On January 20, 2001,1 the 

Speaker inserted the following memorandum of understanding between the chairmen of the Committee on Financial Services and 

the Committee on Energy and Commerce further clarifying these 

jurisdictional changes—

JANUARY 20, 2001. 

On January 3, 2001, the House agreed to H. Res. 5, establishing 

the rules of the House for the 107th Congress. Section 2(d) of H. 

Res. 5 contained a provision renaming the Banking Committee as 

the Financial Services Committee and transferring jurisdiction over 

securities and exchanges and insurance from the Commerce Committee to the Financial Services Committee. The Commerce Committee was also renamed the Energy and Commerce Committee. 

The Committee on Energy and Commerce and the Committee on 

Financial Services jointly acknowledge as the authoritative source 

of legislative history concerning section 2(d) of H. Res. 5 the following statement of Rules Committee Chairman David Dreier during floor consideration of the resolution:

In what is obviously one of our most significant changes, 

Mr. Speaker, section 2(d) of the resolution establishes a 

new Committee on Financial Services, which will have jurisdiction over the following matters: 

(1) banks and banking, including deposit insurance 

and Federal monetary policy; 

(2) economic stabilization, defense production, renegotiation, and control of the price of commodities, 

rents, and services; 

(3) financial aid to commerce and industry (other 

than transportation); 

(4) insurance generally; 

(5) international finance; 

(6) international financial and monetary organizations; 

(7) money and credit, including currency and the 

issuance of notes and redemption thereof; gold and silver, including the coinage thereof; valuation and revaluation of the dollar; 

(8) public and private housing; 

(9) securities and exchanges; and 

(10) urban development. 

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Mr. Speaker, jurisdiction over matters relating to securities and exchanges is transferred in its entirety from the 

Committee on Commerce, which will be redesignated 

under this rules change to the Committee on Energy and 

Commerce, and it will now be transferred from the new 

Committee on Energy and Commerce to this new Committee on Financial Services. This transfer is not intended 

to convey to the Committee on Financial Services jurisdiction currently in the Committee on Agriculture regarding 

commodity exchanges. 

Furthermore, this change is not intended to convey to 

the Committee on Financial Services jurisdiction over matters relating to regulation and SEC oversight of multiState public utility holding companies and their subsidiaries, which remain essentially matters of energy policy. 

Mr. Speaker, as a result of the transfer of jurisdiction 

over matters relating to securities and exchanges, redundant jurisdiction over matters relating to bank capital 

markets activities generally and depository institutions securities activities, which were formerly matters in the jurisdiction of the Committee on Banking and Financial 

Services, have been removed from clause 1 of rule X. 

Matters relating to insurance generally, formerly within 

the jurisdiction of the redesignated Committee on Energy 

and Commerce, are transferred to the jurisdiction of the 

Committee on Financial Services. 

The transfer of any jurisdiction to the Committee on Financial Services is not intended to limit the Committee on 

Energy and Commerce’s jurisdiction over consumer affairs 

and consumer protection matters. 

Likewise, existing health insurance jurisdiction is not 

transferred as a result of this change. 

Furthermore, the existing jurisdictions of other committees with respect to matters relating to crop insurance, 

Workers’ Compensation, insurance anti-trust matters, disaster insurance, veterans’ life and health insurance, and 

national social security policy are not affected by this 

change. 

Finally, Mr. Speaker, the changes and legislative history 

involving the Committee on Financial Services and the 

Committee on Energy and Commerce do not preclude future memorandum of understanding between the chairmen 

of these respective committees.’’

By this memorandum the two committees undertake to record 

their further mutual understandings in this matter, which will supplement the statement quoted above. 

It is agreed that the Committee on Energy and Commerce will 

retain jurisdiction over bills dealing broadly with electronic commerce, including electronic communications networks (ECNs). However, a bill amending the securities laws to address the specific 

type of electronic securities transaction currently governed by a 

special SEC regulation as an Alternative Trading System (ATS) 

would be referred to the Committee on Financial Services. 

While it is agreed that the jurisdiction of the Committee on Financial Services over securities and exchanges includes anti-fraud 

4

authorities under the securities laws, the Committee on Energy 

and Commerce will retain jurisdiction only over the issue of setting 

of accounting standards by the Financial Accounting Standards 

Board.

W.J. ‘‘BILLY’’ TAUZIN, Chairman, Committee on Energy and Commerce. 

MICHAEL G. OXLEY, Chairman, Committee on Financial Services.

RULES OF THE COMMITTEE ON FINANCIAL SERVICES FOR 

THE ONE HUNDRED EIGHTH CONGRESS 

RULE 1

GENERAL PROVISIONS

(a) The rules of the House are the rules of the Committee on Financial Services (hereinafter in these rules referred to as the ‘‘Committee’’) and its subcommittees so far as applicable, except that a 

motion to recess from day to day, and a motion to dispense with 

the first reading (in full) of a bill or resolution, if printed copies are 

available, are privileged motions in the Committee and shall be 

considered without debate. A proposed investigative or oversight 

report shall be considered as read if it has been available to the 

members of the Committee for at least 24 hours (excluding Saturdays, Sundays, or legal holidays except when the House is in session on such day). 

(b) Each subcommittee is a part of the Committee, and is subject 

to the authority and direction of the Committee and to its rules so 

far as applicable. 

(c) The provisions of clause 2 of rule XI of the Rules of the House 

are incorporated by reference as the rules of the Committee to the 

extent applicable. 

RULE 2

MEETINGS

Calling of Meetings 

(a)(1) The Committee shall regularly meet on the first Tuesday 

of each month when the House is in session. 

(2) A regular meeting of the Committee may be dispensed with 

if, in the judgment of the Chairman of the Committee (hereinafter 

in these rules referred to as the ‘‘Chair’’), there is no need for the 

meeting. 

(3) Additional regular meetings and hearings of the Committee 

may be called by the Chair, in accordance with clause 2(g)(3) of 

rule XI of the rules of the House. 

(4) Special meetings shall be called and convened by the Chair 

as provided in clause 2(c)(2) of rule XI of the Rules of the House. 

Notice for Meetings 

(b)(1) The Chair shall notify each member of the Committee of 

the agenda of each regular meeting of the Committee at least two 

calendar days before the time of the meeting. 

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(2) The Chair shall provide to each member of the Committee, at 

least two calendar days before the time of each regular meeting for 

each measure or matter on the agenda a copy of—

(A) the measure or materials relating to the matter in question; and 

(B) an explanation of the measure or matter to be considered, which, in the case of an explanation of a bill, resolution, 

or similar measure, shall include a summary of the major provisions of the legislation, an explanation of the relationship of 

the measure to present law, and a summary of the need for the 

legislation. 

(3) The agenda and materials required under this subsection 

shall be provided to each member of the Committee at least three 

calendar days before the time of the meeting where the measure 

or matter to be considered was not approved for full Committee 

consideration by a subcommittee of jurisdiction. 

(4) The provisions of this subsection may be waived by a twothirds vote of the Committee or by the Chair with the concurrence 

of the ranking minority member. 

RULE 3

MEETING AND HEARING PROCEDURES

In General 

(a)(1) Meetings and hearings of the Committee shall be called to 

order and presided over by the Chair or, in the Chair’s absence, by 

the member designated by the Chair as the Vice Chair of the Committee, or by the ranking majority member of the Committee 

present as Acting Chair. 

(2) Meetings and hearings of the committee shall be open to the 

public unless closed in accordance with clause 2(g) of rule XI of the 

Rules of the House. 

(3) Any meeting or hearing of the Committee that is open to the 

public shall be open to coverage by television broadcast, radio 

broadcast, and still photography in accordance with the provisions 

of clause 4 of rule XI of the Rules of the House (which are incorporated by reference as part of these rules). Operation and use of 

any Committee operated broadcast system shall be fair and nonpartisan and in accordance with clause 4(b) of rule XI and all other 

applicable rules of the Committee and the House.

(4) Opening statements by members at the beginning of any 

hearing or meeting of the Committee shall be limited to 5 minutes 

each for the Chair or ranking minority member, or their respective 

designee, and 3 minutes each for all other members. 

(5) No person, other than a Member of Congress, Committee 

staff, or an employee of a Member when that Member has an 

amendment under consideration, may stand in or be seated at the 

rostrum area of the Committee rooms unless the Chair determines 

otherwise. 

Quorum 

(b)(1) For the purpose of taking testimony and receiving evidence, two members of the Committee shall constitute a quorum. 

6

(2) A majority of the members of the Committee shall constitute 

a quorum for the purposes of reporting any measure or matter, of 

authorizing a subpoena, of closing a meeting or hearing pursuant 

to clause 2(g) of rule XI of the rules of the House (except as provided in clause 2(g)(2)(A) and (B)) or of releasing executive session 

material pursuant to clause 2(k)(7) of rule XI of the rules of the 

House. 

(3) For the purpose of taking any action other than those specified in paragraph (2) one-third of the members of the Committee 

shall constitute a quorum. 

Voting 

(c)(1) No vote may be conducted on any measure or matter pending before the Committee unless the requisite number of members 

of the Committee is actually present for such purpose. 

(2) A record vote of the Committee shall be provided on any question before the Committee upon the request of one-fifth of the 

members present. 

(3) No vote by any member of the Committee on any measure or 

matter may be cast by proxy. 

(4) In accordance with clause 2(e)(1)(B) of rule XI, a record of the 

vote of each member of the Committee on each record vote on any 

measure or matter before the Committee shall be available for public inspection at the offices of the Committee, and, with respect to 

any record vote on any motion to report or on any amendment, 

shall be included in the report of the Committee showing the total 

number of votes cast for and against and the names of those members voting for and against. 

(5) POSTPONED RECORD VOTES.—(A) Subject to subparagraph (B), 

the Chairman may postpone further proceedings when a record 

vote is ordered on the question of approving any measure or matter 

or adopting an amendment. The Chairman may resume proceedings on a postponed request at any time, but no later than the 

next meeting day. 

(B) In exercising postponement authority under subparagraph 

(A), the Chairman shall take all reasonable steps necessary to notify members on the resumption of proceedings on any postponed 

record vote; 

(C) When proceedings resume on a postponed question, not-withstanding any intervening order for the previous question, an underlying proposition shall remain subject to further debate or amendment to the same extent as when the question was postponed. 

Hearing Procedures 

(d)(1)(A) The Chair shall make public announcement of the date, 

place, and subject matter of any committee hearing at least one 

week before the commencement of the hearing, unless the Chair, 

with the concurrence of the ranking minority member, or the Committee by majority vote with a quorum present for the transaction 

of business, determines there is good cause to begin the hearing 

sooner, in which case the Chair shall make the announcement at 

the earliest possible date. 

(B) Not less than three days before the commencement of a hearing announced under this paragraph, the Chair shall provide to the 

7

members of the Committee a concise summary of the subject of the 

hearing, or, in the case of a hearing on a measure or matter, a copy 

of the measure or materials relating to the matter in question and 

a concise explanation of the measure or matter to be considered. 

(2) To the greatest extent practicable—

(A) each witness who is to appear before the Committee shall file 

with the Committee two business days in advance of the appearance sufficient copies (including a copy in electronic form), as determined by the Chair, of a written statement of proposed testimony 

and shall limit the oral presentation to the Committee to brief 

summary thereof; and 

(B) each witness appearing in a non-governmental capacity shall 

include with the written statement of proposed testimony a curriculum vitae and a disclosure of the amount and source (by agency 

and program) of any Federal grant (or subgrant thereof) or contract 

(or subcontract thereof) received during the current fiscal year or 

either of the two preceding fiscal years.

(3) The requirements of paragraph (2)(A) may be modified or 

waived by the Chair when the Chair determines it to be in the best 

interest of the Committee. 

(4) The five-minute rule shall be observed in the interrogation of 

witnesses before the Committee until each member of the Committee has had an opportunity to question the witnesses. No member shall be recognized for a second period of 5 minutes to interrogate witnesses until each member of the Committee present has 

been recognized once for that purpose. 

(5) Whenever any hearing is conducted by the Committee on any 

measure or matter, the minority party members of the Committee 

shall be entitled, upon the request of a majority of them before the 

completion of the hearing, to call witnesses with respect to that 

measure or matter during at least one day of hearing thereon. 

Subpoenas and Oaths 

(e)(1) Pursuant to clause 2(m) of rule XI of the Rules of the 

House, a subpoena may be authorized and issued by the Committee 

or a subcommittee in the conduct of any investigation or series of 

investigations or activities, only when authorized by a majority of 

the members voting, a majority being present, or pursuant to paragraph (2). 

(2) The Chair, with the concurrence of the ranking minority 

member, may authorize and issue subpoenas under such clause 

during any period for which the House has adjourned for a period 

in excess of 3 days when, in the opinion of the Chair, authorization 

and issuance of the subpoena is necessary to obtain the material 

or testimony set forth in the subpoena. The Chair shall report to 

the members of the Committee on the authorization and issuance 

of a subpoena during the recess period as soon as practicable, but 

in no event later than one week after service of such subpoena. 

(3) Authorized subpoenas shall be signed by the Chair or by any 

member designated by the Committee, and may be served by any 

person designated by the Chair or such member. 

(4) The Chair, or any member of the Committee designated by 

the Chair, may administer oaths to witnesses before the Committee. 

8

Special Procedures 

(f)(1)(A) COMMEMORATIVE MEDALS AND COINS.—It shall not be in 

order for the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology to hold a hearing on any commemorative medal or commemorative coin legislation unless the 

legislation is cosponsored by at least two-thirds of the members of 

the House and has been recommended by the U.S. Mint’s Citizens 

Commemorative Coin Advisory Committee in the case of a commemorative coin. 

(B) It shall not be in order for the subcommittee to approve a bill 

or measure authorizing commemorative coins for consideration by 

the full Committee which does not conform with the mintage restrictions established by section 5112 of title 31, United States 

Code. 

(C) In considering legislation authorizing Congressional gold 

medals, the subcommittee shall apply the following standards—

(i) the recipient shall be a natural person; 

(ii) the recipient shall have performed an achievement that 

has an impact on American history and culture that is likely 

to be recognized as a major achievement in the recipient’s field 

long after the achievement; 

(iii) the recipient shall not have received a medal previously 

for the same or substantially the same achievement; 

(iv) the recipient shall be living or, if deceased, shall have 

been deceased for not less than 5 years and not more than 25 

years; 

(v) the achievements were performed in the recipient’s field 

of endeavor, and represent either a lifetime of continuous superior achievements or a single achievement so significant that 

the recipient is recognized and acclaimed by others in the same 

field, as evidenced by the recipient having received the highest 

honors in the field. 

(2) TESTIMONY OF CERTAIN OFFICIALS.—

(A) Notwithstanding subsection (a)(4), when the Chair announces a hearing of the Committee for the purpose of receiving—

(i) testimony from the Chairman of the Federal Reserve 

Board pursuant to section 2B of the Federal Reserve Act 

(12 U.S.C. 221 et seq.), or 

(ii) testimony from the Chairman of the Federal Reserve 

Board or a member of the President’s cabinet at the invitation of the Chair, the Chair may, in consultation with the 

ranking minority member, limit the number and duration 

of opening statements to be delivered at such hearing. The 

limitation shall be included in the announcement made 

pursuant to subsection (d)(1)(A), and shall provide that the 

opening statements of all members of the Committee shall 

be made a part of the hearing record.

RULE 4

PROCEDURES FOR REPORTING MEASURES OR MATTERS

(a) No measure or matter shall be reported from the Committee 

unless a majority of the Committee is actually present. 

9

(b) The Chair of the Committee shall report or cause to be reported promptly to the House any measure approved by the Committee and take necessary steps to bring a matter to a vote. 

(c) The report of the Committee on a measure which has been approved by the Committee shall be filed within seven calendar days 

(exclusive of days on which the House is not in session) after the 

day on which there has been filed with the clerk of the Committee 

a written request, signed by a majority of the members of the Committee, for the reporting of that measure pursuant to the provisions 

of clause 2(b)(2) of rule XIII of the Rules of the House. 

(d) All reports printed by the Committee pursuant to a legislative 

study or investigation and not approved by a majority vote of the 

Committee shall contain the following disclaimer on the cover of 

such report: ‘‘This report has not been officially adopted by the 

Committee on Financial Services and may not necessarily reflect 

the views of its Members.’’

RULE 5

SUBCOMMITTEES

Establishment and Responsibilities of Subcommittees 

(a)(1) There shall be 5 subcommittees of the Committee as follows: 

(A) SUBCOMMITTEE ON CAPITAL MARKETS, INSURANCE, AND

GOVERNMENT SPONSORED ENTERPRISES.—The jurisdiction of the 

Subcommittee on Capital Markets, Insurance, and Government 

Sponsored Enterprises includes—

(i) securities, exchanges, and finance; 

(ii) capital markets activities; 

(iii) activities involving futures, forwards, options, and 

other types of derivative instruments; 

(iv) secondary market organizations for home mortgages 

including the Federal National Mortgage Association, the 

Federal Home Loan Mortgage Corporation, and the Federal Agricultural Mortgage Corporation; 

(v) the Office of Federal Housing Enterprise Oversight; 

(vi) the Federal Home Loan Banks; and 

(vii) insurance generally. 

(B) SUBCOMMITTEE ON DOMESTIC AND INTERNATIONAL MONETARY POLICY, TRADE, AND TECHNOLOGY.—The jurisdiction of the 

Subcommittee on Domestic and International Monetary Policy, 

Trade, and Technology includes—

(i) financial aid to all sectors and elements within the 

economy; 

(ii) economic growth and stabilization; 

(iii) defense production matters as contained in the Defense Production Act of 1950, as amended; 

(iv) domestic monetary policy, and agencies which directly or indirectly affect domestic monetary policy, including the effect of such policy and other financial actions on 

interest rates, the allocation of credit, and the structure 

and functioning of domestic financial institutions; 

(v) coins, coinage, currency, and medals, including commemorative coins and medals, proof and mint sets and 

10

other special coins, the Coinage Act of 1965, gold and silver, including the coinage thereof (but not the par value of 

gold), gold medals, counterfeiting, currency denominations 

and design, the distribution of coins, and the operations of 

the Bureau of the Mint and the Bureau of Engraving and 

Printing; 

(vi) development of new or alternative forms of currency; 

(vii) multilateral development lending institutions, including activities of the National Advisory Council on 

International Monetary and Financial Policies as related 

thereto, and monetary and financial developments as they 

relate to the activities and objectives of such institutions; 

(viii) international trade, including but not limited to the 

activities of the Export-Import Bank; 

(ix) the International Monetary Fund, its permanent and 

temporary agencies, and all matters related thereto; and 

(x) international investment policies, both as they relate 

to United States investments for trade purposes by citizens 

of the United States and investments made by all foreign 

entities in the United States. 

(C) Subcommittee on financial institutions and consumer 

credit.—The jurisdiction of the Subcommittee on Financial Institutions and Consumer Credit includes—

(i) all agencies, including the Office of the Comptroller of 

the Currency, the Federal Deposit Insurance Corporation, 

the Board of Governors of the Federal Reserve System and 

the Federal Reserve System, the Office of Thrift Supervision, and the National Credit Union Administration, 

which directly or indirectly exercise supervisory or regulatory authority in connection with, or provide deposit insurance for, financial institutions, and the establishment 

of interest rate ceilings on deposits; 

(ii) the chartering, branching, merger, acquisition, consolidation, or conversion of financial institutions; 

(iii) consumer credit, including the provision of consumer 

credit by insurance companies, and further including those 

matters in the Consumer Credit Protection Act dealing 

with truth in lending, extortionate credit transactions, restrictions on garnishments, fair credit reporting and the 

use of credit information by credit bureaus and credit providers, equal credit opportunity, debt collection practices, 

and electronic funds transfers; 

(iv) creditor remedies and debtor defenses, Federal aspects of the Uniform Consumer Credit Code, credit and 

debit cards, and the preemption of State usury laws; 

(v) consumer access to financial services, including the 

Home Mortgage Disclosure Act and the Community Reinvestment Act; 

(vi) the terms and rules of disclosure of financial services, including the advertisement, promotion and pricing of 

financial services, and availability of government check 

cashing services; 

(vii) deposit insurance; and 

11

(viii) consumer access to savings accounts and checking 

accounts in financial institutions, including lifeline banking and other consumer accounts. 

(D) SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPOR- TUNITY.—The jurisdiction of the Subcommittee on Housing and 

Community Opportunity includes— (i) housing (except programs administered by the Department of Veterans Affairs), including mortgage and 

loan insurance pursuant to the National Housing Act; 

rural housing; housing and homeless assistance programs; 

all activities of the Government National Mortgage Association; private mortgage insurance; housing construction 

and design and safety standards; housing-related energy 

conservation; housing research and demonstration programs; financial and technical assistance for nonprofit 

housing sponsors; housing counseling and technical assistance; regulation of the housing industry (including landlord/tenant relations); and real estate lending including 

regulation of settlement procedures; 

(ii) community development and community and neighborhood planning, training and research; national urban 

growth policies; urban/rural research and technologies; and 

regulation of interstate land sales; 

(iii) government sponsored insurance programs, including those offering protection against crime, fire, flood (and 

related land use controls), earthquake and other natural 

hazards; and 

(iv) the qualifications for and designation of Empowerment Zones and Enterprise Communities (other than matters relating to tax benefits). 

(E) SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS.—The 

jurisdiction of the Subcommittee on Oversight and Investigations includes— (i) the oversight of all agencies, departments, programs, 

and matters within the jurisdiction of the Committee, including the development of recommendations with regard 

to the necessity or desirability of enacting, changing, or repealing any legislation within the jurisdiction of the Committee, and for conducting investigations within such jurisdiction; and 

(ii) research and analysis regarding matters within the 

jurisdiction of the Committee, including the impact or 

probable impact of tax policies affecting matters within the 

jurisdiction of the Committee. 

(2) In addition, each such subcommittee shall have specific responsibility for such other measures or matters as the Chair refers 

to it. 

(3) Each subcommittee of the Committee shall review and study, 

on a continuing basis, the application, administration, execution, 

and effectiveness of those laws, or parts of laws, the subject matter 

of which is within its general responsibility. 

Referral of Measures and Matters to Subcommittees 

(b)(1) The Chair shall regularly refer to one or more subcommittees such measures and matters as the Chair deems appropriate 

12

given its jurisdiction and responsibilities. In making such a referral, the Chair may designate a subcommittee of primary jurisdiction and subcommittees of additional or sequential jurisdiction. 

(2) All other measures or matters shall be subject to consideration by the full Committee. 

(3) In referring any measure or matter to a subcommittee, the 

Chair may specify a date by which the subcommittee shall report 

thereon to the Committee.

(4) The Committee by motion may discharge a subcommittee 

from consideration of any measure or matter referred to a subcommittee of the Committee. 

Composition of Subcommittees 

(c)(1) Members shall be elected to each subcommittee and to the 

positions of chair and ranking minority member thereof, in accordance with the rules of the respective party caucuses. The Chair of 

the Committee shall designate a member of the majority party on 

each subcommittee as its vice chair. 

(2) The Chair and ranking minority member of the Committee 

shall be ex officio members with voting privileges of each subcommittee of which they are not assigned as members and may be 

counted for purposes of establishing a quorum in such subcommittees. 

(3) The subcommittees shall be comprised as follows: 

(A) The Subcommittee on Capital Markets, Insurance, and 

Government Sponsored Enterprises shall be comprised of 49 

members, 26 elected by the majority caucus and 23 elected by 

the minority caucus. 

(B) The Subcommittee on Domestic and International Monetary Policy, Trade, and Technology shall be comprised of 26 

members, 14 elected by the majority caucus and 12 elected by 

the minority caucus. 

(C) The Subcommittee on Financial Institutions and Commercial Credit shall be comprised of 47 members, 25 elected by 

the majority caucus and 22 elected by the minority caucus. 

(D) The Subcommittee on Housing and Community Opportunity shall be comprised of 26 members, 14 elected by the majority caucus and 12 elected by the minority caucus. 

(E) The Subcommittee on Oversight and Investigations shall 

be comprised of 20 members, 11 elected by the majority caucus 

and 9 elected by the minority caucus. 

Subcommittee Meetings and Hearings 

(d)(1) Each subcommittee of the Committee is authorized to 

meet, hold hearings, receive testimony, mark up legislation, and report to the full Committee on any measure or matter referred to 

it, consistent with subsection (a). 

(2) No subcommittee of the Committee may meet or hold a hearing at the same time as a meeting or hearing of the Committee. 

(3) The chair of each subcommittee shall set hearing and meeting 

dates only with the approval of the Chair with a view toward assuring the availability of meeting rooms and avoiding simultaneous 

scheduling of Committee and subcommittee meetings or hearings. 

13

Effect of a Vacancy 

(e) Any vacancy in the membership of a subcommittee shall not 

affect the power of the remaining members to execute the functions 

of the subcommittee as long as the required quorum is present. 

Records 

(f) Each subcommittee of the Committee shall provide the full 

Committee with copies of such records of votes taken in the subcommittee and such other records with respect to the subcommittee 

as the Chair deems necessary for the Committee to comply with all 

rules and regulations of the House. 

RULE 6

STAFF

In General 

(a)(1) Except as provided in paragraph (2), the professional and 

other staff of the Committee shall be appointed, and may be removed by the Chair, and shall work under the general supervision 

and direction of the Chair. 

(2) All professional and other staff provided to the minority party 

members of the Committee shall be appointed, and may be removed, by the ranking minority member of the Committee, and 

shall work under the general supervision and direction of such 

member. 

(3) It is intended that the skills and experience of all members 

of the Committee staff be available to all members of the Committee. 

Subcommittee Staff 

(b) From funds made available for the appointment of staff, the 

Chair of the Committee shall, pursuant to clause 6(d) of rule X of 

the Rules of the House, ensure that sufficient staff is made available so that each subcommittee can carry out its responsibilities 

under the rules of the Committee and that the minority party is 

treated fairly in the appointment of such staff. 

Compensation of Staff

(c)(1) Except as provided in paragraph (2), the Chair shall fix the 

compensation of all professional and other staff of the Committee. 

(2) The ranking minority member shall fix the compensation of 

all professional and other staff provided to the minority party 

members of the Committee. 

RULE 7

BUDGET AND TRAVEL

Budget 

(a)(1) The Chair, in consultation with other members of the Committee, shall prepare for each Congress a budget providing 

amounts for staff, necessary travel, investigation, and other expenses of the Committee and its subcommittees. 

14

(2) From the amount provided to the Committee in the primary 

expense resolution adopted by the House of Representatives, the 

Chair, after consultation with the ranking minority member, shall 

designate an amount to be under the direction of the ranking minority member for the compensation of the minority staff, travel expenses of minority members and staff, and minority office expenses. All expenses of minority members and staff shall be paid 

for out of the amount so set aside. 

Travel 

(b)(1) The Chair may authorize travel for any member and any 

staff member of the Committee in connection with activities or subject matters under the general jurisdiction of the Committee. Before such authorization is granted, there shall be submitted to the 

Chair in writing the following: 

(A) The purpose of the travel. 

(B) The dates during which the travel is to occur. 

(C) The names of the States or countries to be visited and 

the length of time to be spent in each. 

(D) The names of members and staff of the Committee for 

whom the authorization is sought. 

(2) Members and staff of the Committee shall make a written report to the Chair on any travel they have conducted under this 

subsection, including a description of their itinerary, expenses, and 

activities, and of pertinent information gained as a result of such 

travel. 

(3) Members and staff of the Committee performing authorized 

travel on official business shall be governed by applicable laws, resolutions, and regulations of the House and of the Committee on 

House Administration. 

RULE 8

COMMITTEE ADMINISTRATION

Records 

(a)(1) There shall be a transcript made of each regular meeting 

and hearing of the Committee, and the transcript may be printed 

if the Chair decides it is appropriate or if a majority of the members of the Committee requests such printing. Any such transcripts 

shall be a substantially verbatim account of remarks actually made 

during the proceedings, subject only to technical, grammatical, and 

typographical corrections authorized by the person making the remarks. Nothing in this paragraph shall be construed to require 

that all such transcripts be subject to correction and publication. 

(2) The Committee shall keep a record of all actions of the Committee and of its subcommittees. The record shall contain all information required by clause 2(e)(1) of rule XI of the Rules of the 

House and shall be available for public inspection at reasonable 

times in the offices of the Committee. 

(3) All Committee hearings, records, data, charts, and files shall 

be kept separate and distinct from the congressional office records 

of the Chair, shall be the property of the House, and all Members 

of the House shall have access thereto as provided in clause 2(e)(2) 

of rule XI of the Rules of the House. 

15

(4) The records of the Committee at the National Archives and 

Records Administration shall be made available for public use in 

accordance with rule VII of the Rules of the House of Representatives. The Chair shall notify the ranking minority member of any 

decision, pursuant to clause 3(b)(3) or clause 4(b) of the rule, to 

withhold a record otherwise available, and the matter shall be presented to the Committee for a determination on written request of 

any member of the Committee. 

Committee Publications on the Internet 

(b) To the maximum extent feasible, the Committee shall make 

its publications available in electronic form.

(17)

MEMBERSHIP AND ORGANIZATION OF THE COMMITTEE ON 

FINANCIAL SERVICES

ONE HUNDRED EIGHTH CONGRESS

COMMITTEE ON FINANCIAL SERVICES

(Ratio: 37–32–1)

MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa †

RICHARD H. BAKER, Louisiana †

SPENCER BACHUS, Alabama 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

ROBERT W. NEY, Ohio 

SUE W. KELLY, New York 

Vice Chair

RON PAUL, Texas †

PAUL E. GILLMOR, Ohio 

JIM RYUN, Kansas †

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

DOUG OSE, California 

JUDY BIGGERT, Illinois 

MARK GREEN, Wisconsin 

PATRICK J. TOOMEY, Pennsylvania 

CHRISTOPHER SHAYS, Connecticut 

JOHN B. SHADEGG, Arizona 

VITO FOSSELLA, New York 

GARY G. MILLER, California 

MELISSA A. HART, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

PATRICK J. TIBERI, Ohio 

MARK R. KENNEDY, Minnesota 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

TIM MURPHY, Pennsylvania 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

KATHERINE HARRIS, Florida 

RICK RENZI, Arizona 

JIM GERLACH, Pennsylvania 4

BARNEY FRANK, Massachusetts 

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

DARLENE HOOLEY, Oregon 

JULIA CARSON, Indiana 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

BARBARA LEE, California 

JAY INSLEE, Washington 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

HAROLD E. FORD, JR., Tennessee 

RUBE ́ N HINOJOSA, Texas 

KEN LUCAS, Kentucky 

JOSEPH CROWLEY, New York 

WM. LACY CLAY, Missouri 

STEVE ISRAEL, New York 

MIKE ROSS, Arkansas 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

JIM MATHESON, Utah 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

RAHM EMANUEL, Illinois 

DAVID SCOTT, Georgia 

ARTUR DAVIS, Alabama 

CHRIS BELL, Texas 1

BERNARD SANDERS, Vermont*

*Mr. Sanders is an independent, but caucuses with the Democratic Caucus. 

18

SUBCOMMITTEE MEMBERSHIPS

SUBCOMMITTEE ON CAPITAL MARKETS, INSURANCE, AND GOVERNMENT SPONSORED

ENTERPRISES

(Ratio: 26–23)

RICHARD H. BAKER, Louisiana, Chairman

DOUG OSE, California 

Vice Chairman

CHRISTOPHER SHAYS, Connecticut 

PAUL E. GILLMOR, Ohio 

SPENCER BACHUS, Alabama 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

FRANK D. LUCAS, Oklahoma 

EDWARD R. ROYCE, California 

DONALD A. MANZULLO, Illinois 

SUE W. KELLY, New York 

ROBERT W. NEY, Ohio 

JOHN B. SHADEGG, Arizona 

JIM RYUN, Kansas 

VITO FOSSELLA, New York 

JUDY BIGGERT, Illinois 

MARK GREEN, Wisconsin 

GARY G. MILLER, California 

PATRICK J. TOOMEY, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

MELISSA A. HART, Pennsylvania 

MARK R. KENNEDY, Minnesota 

PATRICK J. TIBERI, Ohio 

GINNY BROWN-WAITE, Florida 

KATHERINE HARRIS, Florida 

RICK RENZI, Arizona 

MICHAEL G. OXLEY, Ohio 

ex officio

PAUL E. KANJORSKI, Pennsylvania 

GARY L. ACKERMAN, New York 

DARLENE HOOLEY, Oregon 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

JAY INSLEE, Washington 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

HAROLD E. FORD, JR., Tennessee 

RUBE ́ N HINOJOSA, Texas 

KEN LUCAS, Kentucky 

JOSEPH CROWLEY, New York 

STEVE ISRAEL, New York 

MIKE ROSS, Arkansas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

JIM MATHESON, Utah 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

RAHM EMANUEL, Illinois 

DAVID SCOTT, Georgia 

NYDIA M. VELA ́ ZQUEZ, New York 3

BARNEY FRANK, Massachusetts 

ex officio

SUBCOMMITTEE ON DOMESTIC AND INTERNATIONAL MONETARY POLICY, TRADE, AND

TECHNOLOGY

(Ratio: 14–12)

PETER T. KING, New York, Chairman

JUDY BIGGERT, Illinois 

Vice Chair

JAMES A. LEACH, Iowa 

MICHAEL N. CASTLE, Delaware 

RON PAUL, Texas 

DONALD A. MANZULLO, Illinois 

DOUG OSE, California 

JOHN B. SHADEGG, Arizona 

MARK R. KENNEDY, Minnesota 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

TIM MURPHY, Pennsylvania 

J. GRESHAM BARRETT, South Carolina 

KATHERINE HARRIS, Florida 

MICHAEL G. OXLEY, Ohio 

ex officio

CAROLYN B. MALONEY, New York 

BERNARD SANDERS, Vermont*

MELVIN L. WATT, North Carolina 

MAXINE WATERS, California 

BARBARA LEE, California 

PAUL E. KANJORSKI, Pennsylvania 

BRAD SHERMAN, California 

DARLENE HOOLEY, Oregon 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 3

RAHM EMANUEL, Illinois 

CHRIS BELL, Texas 1

BARNEY FRANK, Massachusetts 

ex officio

*Mr. Sanders is an independent, but caucuses with the Democratic Caucus.

19

SUBCOMMITTEE ON FINANCIAL INSTITUTIONS AND CONSUMER CREDIT

(Ratio: 25–22)

SPENCER BACHUS, Alabama, Chairman

STEVEN C. LATOURETTE, Ohio 

Vice Chairman

RICHARD H. BAKER, Louisiana 

MICHAEL N. CASTLE, Delaware 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

SUE W. KELLY, New York 

PAUL E. GILLMOR, Ohio 

JIM RYUN, Kansas 

WALTER B. JONES, North Carolina 

JUDY BIGGERT, Illinois 

PATRICK J. TOOMEY, Pennsylvania 

VITO FOSSELLA, New York 

MELISSA A. HART, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

PATRICK J. TIBERI, Ohio 

MARK R. KENNEDY, Minnesota 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

TIM MURPHY, Pennsylvania 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

RICK RENZI, Arizona 

(Vacancy) 4

MICHAEL G. OXLEY, Ohio 

ex officio

BERNARD SANDERS, Vermont*

CAROLYN B. MALONEY, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

LUIS V. GUTIERREZ, Illinois 

DENNIS MOORE, Kansas 

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 3

DARLENE HOOLEY, Oregon 

JULIA CARSON, Indiana 

HAROLD E. FORD, JR., Tennessee 

RUBE ́ N HINOJOSA, Texas 

KEN LUCAS, Kentucky 

JOSEPH CROWLEY, New York 

STEVE ISRAEL, New York 

MIKE ROSS, Arkansas 

CAROLYN MCCARTHY, New York 

ARTUR DAVIS, Alabama 

JOE BACA, California 3

CHRIS BELL, Texas 1

BARNEY FRANK, Massachusetts 

ex officio

*Mr. Sanders is an independent, but caucuses with the Democratic Caucus. 

SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY

(Ratio: 14–12)

ROBERT W. NEY, Ohio, Chairman

MARK GREEN, Wisconsin 

Vice Chairman

RICHARD H. BAKER, Louisiana 

PETER T. KING, New York 

WALTER B. JONES, Jr. North Carolina 

DOUG OSE, California 

PATRICK J. TOOMEY, Pennsylvania 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

MELISSA A. HART, Pennsylvania 

PATRICK J. TIBERI, Ohio 

KATHERINE HARRIS, Florida 

RICK RENZI, Arizona 

(Vacancy) 4

MICHAEL G. OXLEY, Ohio 

ex officio

MAXINE WATERS, California 

NYDIA M. VELA ́ ZQUEZ, New York 

JULIA CARSON, Indiana 

BARBARA LEE, California 

MICHAEL E. CAPUANO, Massachusetts 

BERNARD SANDERS, Vermont*

MELVIN L. WATT, North Carolina 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

ARTUR DAVIS, Alabama 

BARNEY FRANK, Massachusetts 

ex officio

*Mr. Sanders is an independent, but caucuses with the Democratic Caucus.

20

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

(Ratio: 11–9)

SUE W. KELLY, New York, Chair

RON PAUL, Texas 

Vice Chairman

STEVEN C. LATOURETTE, Ohio 

MARK GREEN, Wisconsin 

JOHN B. SHADEGG, Arizona 

VITO FOSSELLA, New York 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

TIM MURPHY, Pennsylvania 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

MICHAEL G. OXLEY, Ohio 

ex officio

LUIS V. GUTIERREZ, Illinois 

JAY INSLEE, Washington 

DENNIS MOORE, Kansas 

JOSEPH CROWLEY, New York 

CAROLYN B. MALONEY, New York 

JIM MATHESON, Utah 

STEPHEN F. LYNCH, Massachusetts 

ARTUR DAVIS, Alabama 2

CHRIS BELL, Texas 1

BARNEY FRANK, Massachusetts 

ex officio

MEMBERSHIP NOTES

†The following members are on leave from the Committee on Financial Services: Mr. Dreier, 

ranking immediately after Mr. Leach; Ms. Pryce and Mr. Linder, ranking immediately after 

Mr. Baker; Ms. Myrick, ranking immediately after Mr. Paul; and Mr. Sessions, ranking immediately after Mr. Ryun. 1Mr. Bell was elected to the Committee on January 28, 2004, filling a vacancy created 

by the resignation of Mr. Gonzalez on January 20, 2004, who ranked immediately after Mr. 

Moore. On February 25, 2004, Mr. Bell was elected to the Subcommittees on Domestic and 

International Monetary Policy, Trade, and Technology; Financial Institutions and Consumer 

Credit; and Oversight and Investigations to fill vacancies on those subcommittees. 2Mr. Hinojosa was elected to the Subcommittee on Oversight and Investigations on February 

5, 2003, and ranked immediately after Mr. Gonzalez (who at that time ranked immediately 

after Mrs. Maloney). On May 5, 2003, Mr. Hinojosa resigned from the Subcommittee on Oversight and Investigations. Mr. Davis of Alabama was elected to fill the vacancy on May 20, 

2003. 3Ms. Vela ́zquez resigned her seat on the Subcommittee on Financial Institutions and Consumer Credit (where she ranked immediately after Ms. Waters), and Mr. Baca resigned his 

seat on the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology (where he ranked immediately after Ms. Vela ́zquez), both effective February 18, 2004. 

On February 25, 2004, Ms. Vela ́zquez was elected to fill the vacancy on the Subcommittee 

on Capital Markets, Insurance, and Government Sponsored Enterprises created by the resignation of Mr. Gonzalez, and Mr. Baca was elected to fill the vacancy on the Subcommittee 

on Financial Institutions and Consumer Credit created by the resignation of Ms. Vela ́zquez. 4Mr. Bereuter (who ranked immediately after Mr. Leach) resigned from Congress effective 

September 1, 2004. Mr. Gerlach was elected to the Committee on Financial Services to fill 

the vacancy created by Mr. Bereuter’s resignation on September 23, 2004. The vacancies 

on the Subcommittee on Financial Institutions and Consumer Credit and the Subcommittee 

on Housing and Community Opportunity created by Mr. Bereuter’s resignation remained unfilled for the duration of the 108th Congress.

21

COMMITTEE STAFF

MAJORITY STAFF

ROBERT U. FOSTER, III 

Staff Director

PEGGY A. PETERSON

Communications Director and Deputy Staff Director

CARTER K. MCDOWELL

Chief Counsel

HUGH NATHANIAL HALPERN

General Counsel

JAMES K. CONZELMAN

Counselor to the Chairman

PETER BARRETT, Counsel

DIRK BARTLETT, Professional Staff Member

SINDEY J. BLACKMER, Special Counsel

CINDY VOSPER CHETTI, Senior Professional Staff Member

JAMES H. CLINGER, Senior Counsel

JUSTIN D. DALY, Senior Counsel

DALE MICHELE DORR, Executive Assisstant

DAVID M. EPPSTEIN, Counsel

DINA ELLIS, Senior Counsel

GEORGE M. FOOTE, Staff Assistant

ANGELA S. GAMBO, Administrative Assistant

ROBERT GORDON, Senior Counsel

KRISTEN JACONI, Counsel

TALLMAN JOHNSON, Professional Staff Member

CLINTON COLUMBUS JONES, III, Senior Counsel

PAUL M. KANGAS, Senior Professional Staff Member

ROSEMARY ELIZABETH KEECH, Executive Staff Assistant

KEVIN MACMILLAN, Senior Counsel

BARBARA MATTHEWS, Senior Counsel

SARAH MORGAN, Assistant Communications Director

DAVID OXNER, Staff Assistant

JOE PINDER, Senior Professional Staff

BEVERLY B. PRICE, Staff Assistant

BRENDAN REILLY, Professional Staff Member

LOIS RICHERSON, Clerk

CHRISTOPHER ROSELLO, Professional Staff Member

FRANK A. TILLOTSON, Senior Counsel

HOWARD TRAUL, Staff Assistant

KIM TRIMBLE, Calendar, Documents, and Systems Administrator

GLENN WESTRICK, Counsel

HEATHER C. WHEELER, Staff Assistant

W. SCOTT WILBER, Senior Counsel

EARNESTINE B. WORELDS, Staff Assistant

JANICE MARIE ZANARDI, Executive Staff Assistant

22

MINORITY STAFF

JEANNE ROSLANOWICK

Staff Director and General Counsel

ELENI CONSTANTINE, Professional Staff Member

TODD CRANFORD, Senior Counsel

RICARDO DELFIN, Counsel

S. KAY GIBBS, Communications Director

GARY GOLDBERG, Professional Staff Member

WARREN GUNNELS, Professional Staff Member

JENNIFER PORTER GORE, Press Secretary

TODD HARPER, Professional Staff Member

ERIKA JEFFERS, Counsel

KELLIE LARKIN, Professional Staff Member

JAIME E. LIZARRAGA, Senior Professional Staff Member

PATTY LORD, Professional Staff Member

DOMINIQUE MCCOY, Counsel

DAN MCGLINCHEY, Professional Staff Member

SCOTT MORRIS, Chief Economist

JONATHAN OBEE, Legislative Assistant

SCOTT OLSON, Professional Staff Member

JEFF RILEY, Counsel

DEAN SAGAR, Senior Policy Analyst

LAWRANNE STEWART, Senior Counsel

KEN SWAB, Counsel

(23)

LEGISLATIVE AND OVERSIGHT ACTIVITIES 

During the 108th Congress, 362 bills were referred to the Committee on Financial Services. The full Committee reported to the 

House or was discharged from the further consideration of 45 

measures, not including conference reports. Thirty-two measures 

regarding matters within the Committee’s jurisdiction were enacted into law. 

The following is a summary of the legislative and oversight activities of the Committee on Financial Services during the 108th 

Congress, including a summary of the activities taken by the Committee to implement its Oversight Plan for the 108th Congress.

(25)

COMMITTEE ON FINANCIAL SERVICES

(Ratio: 37–32–1)

MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa †

RICHARD H. BAKER, Louisiana †

SPENCER BACHUS, Alabama 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

ROBERT W. NEY, Ohio 

SUE W. KELLY, New York 

Vice Chair

RON PAUL, Texas †

PAUL E. GILLMOR, Ohio 

JIM RYUN, Kansas †

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR. North Carolina 

DOUG OSE, California 

JUDY BIGGERT, Illinois 

MARK GREEN, Wisconsin 

PATRICK J. TOOMEY, Pennsylvania 

CHRISTOPHER SHAYS, Connecticut 

JOHN B. SHADEGG, Arizona 

VITO FOSSELLA, New York 

GARY G. MILLER, California 

MELISSA A. HART, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

PATRICK J. TIBERI, Ohio 

MARK R. KENNEDY, Minnesota 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

TIM MURPHY, Pennsylvania 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

KATHERINE HARRIS, Florida 

RICK RENZI, Arizona 

JIM GERLACH, Pennsylvania 

BARNEY FRANK, Massachusetts 

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

DARLENE HOOLEY, Oregon 

JULIA CARSON, Indiana 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

BARBARA LEE, California 

JAY INSLEE, Washington 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

HAROLD E. FORD, JR., Tennessee 

RUBE ́ N HINOJOSA, Texas 

KEN LUCAS, Kentucky 

JOSEPH CROWLEY, New York 

WM. LACY CLAY, Missouri 

STEVE ISRAEL, New York 

MIKE ROSS, Arkansas 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

JIM MATHESON, Utah 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

RAHM EMANUEL, Illinois 

DAVID SCOTT, Georgia 

ARTUR DAVIS, Alabama 

CHRIS BELL, Texas †

BERNARD SANDERS, Vermont *

* Mr. Sanders is an independent, but caucuses with the Democratic Caucus.

LEGISLATIVE ACTIVITIES

UNLAWFUL INTERNET GAMBLING FUNDING PROHIBITION ACT

(H.R. 21; H.R. 2143; H.R. 10; S. 627) 

To prevent the use of certain bank instruments for unlawful 

Internet gambling, and for other purposes. 

Summary 

H.R. 2143, the Unlawful Internet Gambling Funding Prohibition 

Act, directs the Federal functional regulators to prescribe regulations limiting the acceptance of any bank instrument for unlawful 

26

Internet gambling. It defines certain terms and establishes regulatory enforcement authorities. Its primary purpose is to give the 

Federal functional regulators a new, more effective tool for combating offshore Internet gambling sites that illegally extend their 

services to U.S. residents. 

Legislative History 

On January 7, 2003, Mr. Leach introduced H.R. 21, the Unlawful 

Internet Gambling Funding Prohibition Act, with 13 original cosponsors. H.R. 21 was referred to the Committee on Financial Services, and in addition to the Committee on the Judiciary. On March 

13, 2003, the Committee on Financial Services met in open session 

and ordered H.R. 21 favorably reported to the House by a voice 

vote. On March 27, 2003, the Committee on Financial Services reported H.R. 21 to the House (H. Rept. 108–51, Part I). 

On April 29, 2003, the Subcommittee on Crime, Terrorism and 

Homeland Security of the Committee on the Judiciary held a hearing on H.R. 21. On May 6, 2003, the Subcommittee met in open 

session and approved H.R. 21 for consideration by the Committee 

on the Judiciary by a voice vote. On May 14, 2003, the Committee 

on the Judiciary met in open session and ordered H.R. 21 reported 

to the House, as amended, by a record vote of 16 yeas and 15 nays. 

On May 22, 2003, the Committee on the Judiciary reported H.R. 

21 to the House with an amendment (H. Rept. 108–51, Part II). 

On May 19, 2003, Mr. Bachus introduced similar legislation, 

H.R. 2143, the Unlawful Internet Gambling Funding Prohibition 

Act, with two original cosponsors. H.R. 2143 was referred to the 

Committee on Financial Services, which met in open session on 

May 21, 2003, and ordered the bill reported to the House by a voice 

vote. On June 2, 2003, the Committee on Financial Services reported H.R. 2143 to the House (H. Rept. 108–133, Part I). On June 

3, 2003, the Committee on Financial Services filed a supplemental 

report to the House on H.R. 2143 (H. Rept. 108–133, Part II), correcting an error in the original report. 

On June 9, 2003, the Committee on Rules met and reported a 

structured rule providing for consideration of H.R. 2143 (H. Res. 

263). The rule provided for one hour of general debate and consideration of three specified amendments. On June 10, 2003, H. Res. 

263 passed the House. The House then considered and approved 

H.R. 2143 by a record vote of 319 yeas and 104 nays. On June 11, 

2003, H.R. 2143 was received in the Senate, read twice, and referred to the Committee on Banking, Housing, and Urban Affairs. 

On March 13, 2003, Senator Kyl introduced S. 627, companion 

legislation to H.R. 2143. On July 31, 2003, the Senate Committee 

on Banking, Housing, and Urban Affairs met in open session and 

ordered S. 627, as amended, reported to the Senate. On October 27, 

2003, the Senate Committee on Banking, Housing, and Urban Affairs reported S. 627 to the Senate (S. Rept. 108–173). S. 627 was 

placed on the Senate Legislative Calendar under General Orders 

on October 27, 2003. 

The text of H.R. 2143, as passed by the House, was also included 

in the Committee’s amendment to H.R. 10, the 9/11 Recommendations Implementation Act, although it was not included in the text 

ultimately considered by the House. 

27

No further action was taken on this measure during the 108th 

Congress. 

FINANCIAL CONTRACTS BANKRUPTCY REFORM ACT OF 2003

(H.R. 2120; H.R. 10) 

To revise the banking and bankruptcy insolvency laws with respect to the termination and netting of financial contracts, and for 

other purposes. 

Summary 

H.R. 2120, the Financial Contracts Bankruptcy Reform Act of 

2003, amends the banking and bankruptcy insolvency laws with respect to the netting of financial contracts. Specifically, the bill 

amends the U.S. Bankruptcy Code, the Federal Deposit Insurance 

Act (FDIA), as amended by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), the payment system risk reduction and netting provisions of the Federal Deposit 

Insurance Corporation Improvement Act of 1991 (FDICIA), and the 

Securities Investor Protection Act of 1970 (SIPA). These amendments address the treatment of certain financial transactions following the insolvency of a party to those transactions. The amendments are designed to clarify and improve the consistency between 

the applicable statutes and to minimize the risk of a disruption 

within or between financial markets upon the insolvency of a market participant. 

Legislative History 

H.R. 2120 was introduced by Mr. Toomey on May 15, 2003, with 

19 original cosponsors, and was referred to the Committee on Financial Services, and in addition to the Committee on the Judiciary. On May 21, 2003, the Committee on Financial Services met in 

open session and ordered H.R. 2120 reported to the House by a 

voice vote. On September 18, 2003, the Committee on Financial 

Services reported H.R. 2120 to the House (H. Rept. 108–277, Part 

I). The Committee on the Judiciary was granted a series of extensions for further consideration of matters within its jurisdiction 

through June 21, 2004, after which it was discharged from the further consideration of the bill. 

The text of H.R. 2120 as reported by the Committee was included 

in the Committee’s amendment to H.R. 10, the 9/11 Recommendations Implementation Act, although it was not included in the text 

ultimately considered by the House. 

No further action was taken on this measure during the 108th 

Congress. 

COMPACT OF FREE ASSOCIATION AMENDMENTS ACT OF 2003

Public Law 108–188 (H.J. Res. 63) 

A joint resolution to approve the Compact of Free Association, as 

amended, between the Government of the United States of America 

and the Government of the Federated States of Micronesia, and the 

Compact of Free Association, as amended, between the Government of the United States of America and the Government of the 

28

Republic of the Marshall Islands, and to appropriate funds to carry 

out the amended Compacts. 

Summary 

H.J. Res. 63, the Compact of Free Association Amendments Act 

of 2003, is the authorizing and implementing legislation for the 

amended Compacts of Free Association that the United States recently has renegotiated with the Federated States of Micronesia 

(FSM) and the Republic of the Marshall Islands (RMI). The Committee has jurisdiction over section 108 of H.J. Res. 63, as reported 

by the Committee on Resources, which contained language addressing the eligibility of banks chartered in the Republic of the Marshall Islands and the Federated States of Micronesia for Federal 

deposit insurance. 

Legislative History 

H.J. Res. 63 was introduced by Mr. Leach (by request) on July 

8, 2003, with 5 original cosponsors, and was referred to the Committee on International Relations, and in addition to the Committee on Resources. On July 23, 2003, the Committee on International Relations met in open session to consider H.J. Res. 63, 

and ordered the resolution reported, as amended, to the House by 

a voice vote. On September 4, 2003, the Committee on Resources 

met in open session to consider H.J. Res. 63, and ordered the resolution reported, as amended, to the House by a voice vote. On September 4, 2003, the Committee on International Relations reported 

H.J. Res. 63 to the House (H. Rept. 108–262, Part I). 

On September 4, 2003, H.J. Res. 63 was sequentially referred to 

the Committee on the Judiciary, which met in open session on September 10, 2003, to consider the resolution, and ordered it reported 

to the House, as amended, by a voice vote. On September 15, 2003, 

the Committee on the Judiciary reported H.J. Res. 63 to the House 

(H. Rept. 108–262, Part III). 

On September 15, 2003, the Committee on Resources reported 

H.J. Res. 63 to the House (H. Rept. 108–262, Part II). Pursuant to 

an exchange of letters between the Committee on Resources and 

the Committee on Financial Services, this provision was not included in the legislation considered by the House. 

On October 28, 2003, the House considered H.J. Res. 63 under 

suspension of the rules, and passed the resolution, as amended, by 

a voice vote. On October 29, 2003, H.J. Res. 63 was received in the 

Senate, read twice, and placed on the Senate Legislative Calendar 

under General Orders. On November 6, 2003, the Senate passed 

the resolution with amendments by unanimous consent. On November 20, 2003, the House considered the Senate amendments 

under suspension of the rules, and voted to agree to the Senate 

amendments by a record vote of 417 yeas and 2 nays, clearing the 

resolution for the White House. 

H.J. Res. 63 was presented to the White House on December 5, 

2003, and signed into law by the President on December 17, 2003, 

becoming Public Law 108–188. 

29

BANKRUPTCY ABUSE AND PREVENTION ACT OF 2003

(H.R. 975) 

To amend title 11 of the United States Code, and for other purposes. 

Summary 

H.R. 975, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2003, is a comprehensive package of reform measures 

pertaining to both consumer and business bankruptcy cases. The 

purpose of the bill is to improve bankruptcy law and practice by 

restoring personal responsibility and integrity in the bankruptcy 

system and by ensuring that the system is fair for both debtors and 

creditors. 

Legislative History 

H.R. 975 was introduced by Mr. Sensenbrenner on February 27, 

2003, with 50 original cosponsors, and referred to the Committee 

on the Judiciary, and in addition, to the Committee on Financial 

Services. On February 28, 2003, H.R. 975 was referred to the Judiciary Subcommittee on Commercial and Administrative Law. On 

March 12, 2003, the Committee on the Judiciary met in open session and ordered H.R. 975 reported to the House, as amended, by 

a record vote of 18 yeas and 11 nays. On March 18, 2003, the Committee on the Judiciary reported H.R. 975 to the House (H. Rept. 

108–40, Part I). On March 18, 2003, the Committee on Financial 

Services was discharged from the further consideration of H.R. 975, 

pursuant to an exchange of letters. 

On March 18, 2003, the Committee on Rules met and reported 

a rule providing for consideration of H.R. 975 (H. Res. 147). On 

March 19, 2003, the House agreed to H. Res. 147, and then considered and passed H.R. 975 by a record vote of 315 yeas and 113 

nays, with one Member voting present. 

On March 20, 2003, H.R. 975 was received in the Senate, read 

the first time, and placed on the Senate Legislative Calendar. On 

March 21, 2003, H.R. 975 was read the second time, and placed on 

the Senate Legislative Calendar under General Orders. 

No further action was taken on this measure in the 108th Congress. 

SERVICEMEMBERS CIVIL RELIEF ACT OF 2003

Public Law 108–189 (H.R. 100) 

To restate, clarify, and revise the Soldiers’ and Sailors’ Civil Relief Act of 1940. 

Summary 

H.R. 100, the Servicemembers Civil Relief Act, is a comprehensive restatement of the Soldiers’ and Sailors’ Civil Relief Act of 

1940 that would clarify and strengthen the rights and protections 

it provides to persons in military service. The legislation covers 

service members’ financial obligations and liabilities, such as rent, 

mortgages, installment contracts and leases; civil (but not criminal) 

legal proceedings; life insurance; taxes; and rights in public lands. 

30

Legislative History

H.R. 100 was introduced in the House on January 7, 2003, by 

Mr. Smith and one original cosponsor, and was referred to the 

House Committee on Veterans’ Affairs. On February 20, 2003, the 

bill was referred to the Subcommittee on Benefits. On April 3, 

2003, the Committee on Veterans’ Affairs met in open session and 

ordered H.R. 100 to be reported to the House, as amended, by a 

voice vote. On April 30, 2003, the Committee on Veterans’ Affairs 

reported H.R. 100 to the House (H. Rept. 108–81). 

As reported by the Committee on Veterans’ Affairs, H.R. 100 included provisions that fell within the jurisdiction of the Committee 

on Financial Services. Pursuant to an exchange of correspondence, 

the Committee on Veterans’ Affairs agreed to make substantive 

changes to the relevant provisions sought by the Committee on Financial Services, and the Committee on Financial Services agreed 

not to seek a sequential referral of H.R. 100. 

On May 7, 2003, the House considered H.R. 100 under suspension of the rules, and passed the bill by a record vote of 425 yeas 

and no nays. 

The bill was received in the Senate on May 8, 2003, read twice 

and referred to the Committee on Veterans’ Affairs. On November 

21, 2003, the Senate Committee on Veterans’ Affairs was discharged from further consideration of H.R. 100 by unanimous consent, and the bill was laid before the Senate. The Senate struck all 

after the enacting clause and substituted the text of S. 1136. On 

November 21, 2003, the bill passed the Senate with an amendment 

by unanimous consent. 

On December 8, 2003, the House agreed to the Senate amendment by unanimous consent, clearing the bill for the White House. 

On December 12, 2003, the bill was presented to the President. The 

bill was signed into law on December 19, 2003, becoming Public 

Law 108–189. 

INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2004

Public Law 108–77 (H.R. 2417; S. 1025) 

To authorize appropriations for fiscal year 2004 for intelligence 

and intelligence-related activities of the United States Government, 

the Community Management Account, and the Central Intelligence 

Agency Retirement and Disability System, and for other purposes. 

Summary 

H.R. 2417, the Intelligence Authorization Act for Fiscal Year 

2004, authorized activities of the intelligence services for fiscal year 

2004. Several of the provisions of the bill contained matters which 

fell within the jurisdiction of the Committee on Financial Services. 

Section 105 authorizes the establishment of an Office of Intelligence and Analysis within the Department of the Treasury to be 

headed by a presidentially appointed and Senate-confirmed Assistant Secretary. Section 374 provides enhanced authority for authorized intelligence community collection activities designed to prevent, deter, and disrupt terrorism and espionage directed against 

the U.S., by expanding the definition of ‘‘financial institution’’ for 

purposes of section 1114 of the Right to Financial Privacy Act (12 

31

U.S.C. 3414 (RFPA)). Section 376 amends a provision of the USA 

PATRIOT Act (31 U.S.C. 5318A) to authorize the Secretary of the 

Treasury, in judicial proceedings related to a finding that a country, financial institution, transaction, or type of account is of ‘‘primary money laundering concern,’’ to submit any classified information on which such a finding is based to the court ex parte and in 

camera. 

Legislative History 

H.R. 2417 was introduced by Mr. Goss on June 11, 2003, and referred to the Permanent Select Committee on Intelligence. On June 

18, 2003, the Permanent Select Committee on Intelligence reported 

H.R. 2417, as amended, to the House (H. Rept. 108–163). 

On June 24, 2003, the Committee on Rules reported a modified 

closed rule providing for the consideration of H.R. 2417 (H. Res. 

295). The House passed H. Res. 295 on June 25, 2003. The House 

considered H.R. 2417 on June 25, 26, and 27, and passed the bill 

on June 27, 2003, by a record vote of 410 yeas and 9 nays. 

On June 27, 2003, H.R. 2417 was received in the Senate, read 

twice, and placed on the Senate Legislative Calendar under General Orders. The measure was laid before the Senate, amended 

with the text of S. 1025, as amended, and passed by unanimous 

consent on July 31, 2003. The Senate insisted on its amendment 

and appointed conferees from the Select Committee on Intelligence 

and the Senate Committee on Armed Services on August 1, 2003. 

On November 18, 2003, the House disagreed to the Senate 

amendment and agreed to the conference requested by the Senate 

by a voice vote. A motion to instruct the conferees by Ms. Harman 

was agreed to by a record vote of 404 yeas and 12 nays. The Speaker appointed conferees from the Permanent Select Committee on 

Intelligence and the House Committee on Armed Services. As memorialized in a series of letters between the Chairman of the Permanent Select Committee on Intelligence and the Chairman of the 

Committee on Financial Services, the Committee on Financial 

Services did not insist on representation on the conference committee based upon an agreement by the Permanent Select Committee on Intelligence to make changes to the provisions within the 

Financial Services Committee’s jurisdiction. 

On November 19, 2003, the conference report to accompany H.R. 

2417 (H. Rept. 108–381) was filed in the House, and the Committee 

on Rules reported a modified closed rule providing for the consideration of the conference report by the House (H. Res. 451). On November 20, 2003, H. Res. 451 passed the House, and the House 

then passed the Conference Report by a record vote of 264 yeas and 

163 nays. 

On November 21, 2003, the Senate agreed to the conference report by a voice vote, clearing the measure for the White House. The 

bill was presented to the President on December 2, 2003, and 

signed on December 13, 2003, becoming Public Law 108–177. 

32

TEMPORARY REAUTHORIZATION OF THE NATIONAL FLOOD INSURANCE

PROGRAM

Public Law Nos. 108–3, 108–171, and 108–199 (H.R. 11, H.R. 2673, 

and S. 1768) 

To extend the National Flood Insurance Program through 2003. 

Summary 

H.R. 11 reauthorized the NFIP retroactively from January 1, 

2003, through December 31, 2003. S. 1768 extended the authorization of the National Flood Insurance Program from December 31, 

2003, to March 31, 2004, and section 136 of H.R. 2673 further extended the program through June 30, 2004. For further information regarding the permanent reauthorization, see H.R. 253 in the 

legislative activities of the Subcommittee on Housing and Community Opportunity. 

Legislative History 

On January 7, 2003, Chairman Oxley introduced H.R. 11 to extend the National Flood Insurance Program. The bill was referred 

to the House Committee on Financial Services and considered and 

passed by the House under suspension of the rules on January 8, 

2003, by a voice vote. The bill was received in the Senate and read 

three times. The Senate considered and passed the bill without 

amendment by unanimous consent on January 9, 2003, clearing 

the bill for the White House. The bill was signed into law on January 13, 2003, becoming Public Law 108–3. 

S. 1768 was introduced by Senator Bunning on October 21, 2003, 

and referred to the Senate Committee on Banking, Housing, and 

Urban Affairs. On October 27, 2003, the Senate Banking Committee was discharged from the further consideration of the bill 

and the Senate passed the bill without amendment by unanimous 

consent. On October 28, 2003, the bill was referred to the House 

Committee on Financial Services. On November 21, 2003, the Committee on Financial Services was discharged from the further consideration of the bill, and the House passed the bill with an amendment by unanimous consent. On November 24, 2003, the Senate 

agreed to the House amendment by unanimous consent, clearing 

the bill for the White House. On November 25, 2003, S. 1768 was 

presented to the President and signed into law on December 6, 

2003, becoming Public Law 108–171. 

H.R. 2673, the Consolidated Appropriations Act, 2004, was reported as an original measure by the Committee on Appropriations 

on July 9, 2003, as the Agriculture, Rural Development, Food and 

Drug Administration, and Related Agencies Appropriations Act, 

2004. During the conference on that legislation, the conferees 

added section 136, extending the effective date of the National 

Flood Insurance Program through June 30, 2004. The conference 

report was filed in the House on November 25, 2003 (H. Rept. 108–

401). The House agreed to the conference report to accompany H.R. 

2673 on December 8, 2003, by a record vote of 242 yeas and 176 

nays. On January 22, 2004, the Senate agreed to the conference report by a roll call vote of 65 yeas and 28 nays, clearing the bill for 

the White House. It was presented to the President on the same 

33

day, and signed into law on January 23, 2004, becoming Public 

Law 108–199. 

HOSPITAL MORTGAGE INSURANCE

Public Law 108–91 (H.R. 659) 

To amend section 242 of the National Housing Act (12 U.S.C. 

1715z–7) to ensure that hospitals will not be automatically prevented from applying for FHA mortgage insurance. 

Summary 

H.R. 659, the Hospital Mortgage Insurance Act of 2003, amends 

section 242 of the National Housing Act to revise hospital need and 

feasibility standards for purposes of hospital mortgage insurance 

eligibility. The law directs the Secretary of the Department of 

Housing and Urban Development to (1) require satisfactory evidence that the hospital will be located in a State or political subdivision with reasonable minimum licensure and operating standards, and (2) establish the means for determining hospital need 

and feasibility, including following State procedures in States that 

have such official procedures and (3) eliminates the State certificate of need or feasibility study requirement.

Legislative History 

H.R. 659 was introduced on February 11, 2003, by Mr. Ney and 

two original cosponsors and the bill was referred to the Committee 

on Financial Services. On February 13, 2003, the Committee ordered the bill reported to the House by a voice vote. On March 6, 

2003, the Committee reported the bill to the House, without 

amendment (H. Rept. 108–27). 

On March 12, 2003, the House considered H.R. 659 under suspension of the rules, and passed the bill by a record vote of 419 

yeas and no nays. On March 13, 2003, H.R. 659 was received in 

the Senate, read twice, and referred to the Committee on Banking, 

Housing, and Urban Affairs. 

The bill was referred to the Senate Banking, Housing, and Urban 

Affairs Committee on March 13, 2003. On July 31, 2003, the Senate Banking Committee favorably reported the bill with an amendment in the nature of a substitute. The bill was considered and 

passed with an amendment by the Senate on September 2, 2003, 

by unanimous consent. 

On September 17, 2003, the House concurred with the Senate 

amendment under suspension of the rules by a voice vote, clearing 

the bill for the White House. On September 22, 2003, this bill was 

presented to the President for his signature and signed into law on 

October 3, 2003, becoming Public Law 108–91. 

BROWNFIELDS REDEVELOPMENT ENHANCEMENT ACT

(H.R. 239) 

To facilitate the provision of assistance by the Department of 

Housing and Urban Development for the cleanup and economic redevelopment of brownfields. 

34

Summary 

H.R. 239, the Brownfields Redevelopment Enhancement Act, increased access to brownfields redevelopment funds for America’s 

small communities by de-linking Section 108 loan guarantees from 

HUD’s Brownfields Economic Development Initiative (BEDI) 

grants. The bill focused on providing access to capital for local entities that traditionally have had trouble obtaining financing for 

brownfields redevelopment activities. The bill also authorized HUD 

to establish a pilot program for a common brownfields redevelopment loan pool. 

Legislative History 

H.R. 239 was introduced by Mr. Gary G. Miller of California with 

10 original co-sponsors and referred to the Committee on Financial 

Services on January 8, 2003. On February 13, 2003, the Committee 

met in open session and ordered H.R. 239 to be reported to the 

House, by a voice vote. On March 5, 2003, the Committee reported 

H.R. 239 to the House (H. Rept. 108–22). 

No further action was taken on the bill in the 108th Congress. 

EMERGENCY SECURITIES RESPONSE ACT OF 2003

(H.R. 657; H.R. 10) 

To amend the Securities and Exchange Act of 1934 to augment 

the emergency authority of the Securities and Exchange Commission. 

Summary 

H.R. 657, the Emergency Securities Response Act of 2003, provides the Securities and Exchange Commission (SEC) with enhanced authority to respond to extraordinary market disturbances. 

The bill extends the duration of an SEC emergency order from ten 

to thirty business days, and under certain circumstances, up to a 

total of ninety calendar days. 

LEGISLATIVE HISTORY

H.R. 657 was introduced in the House by Mr. Garrett and five 

original cosponsors on February 11, 2003. The bill was referred to 

the Committee on Financial Services. The Committee met in open 

session on February 13, 2003 and ordered H.R. 657 reported to the 

House with a favorable recommendation, with an amendment, by 

a voice vote. 

On February 25, 2003, the Committee on Financial Services reported H.R. 657 to the House (H. Rept. 108–19). On February 26, 

2003, the House considered the bill under suspension of the rules, 

and the House passed H.R. 657, with an amendment, by a voice 

vote. 

On February 27, 2003, the bill was received in the Senate, read 

twice, and referred to the Senate Committee on Banking, Housing, 

and Urban Affairs. 

The legislation was also included as sections 5084–5086 of H.R. 

10, the 9/11 Recommendations Implementation Act, as passed by 

35

the House. For further information regarding action on this measure, please see H.R. 10 in this report. 

AMERICAN 5-CENT COIN DESIGN CONTINUITY ACT OF 2003

Public Law 108–15 (H.R. 258)

To ensure continuity for the design of the 5-cent coin, establish 

the Citizens Coinage Advisory Committee, and for other purposes. 

Summary 

The American 5-Cent Coin Design Continuity Act of 2003 authorizes the Secretary of the Treasury to change the design on the obverse and reverse sides of five-cent coins issued in 2003, 2004, and 

2005, in recognition of the bicentennial of the Louisiana Purchase 

and the expedition of Meriwether Lewis and William Clark. 

The bill also establishes a Citizens Coinage Advisory Committee 

to advise the Secretary on coin designs proposed by the U.S. Mint. 

The panel membership is to include several different specialties to 

ensure that the advice to the Secretary is given independently of 

design input from the Mint. Further, it abolishes the Citizens Commemorative Coin Advisory Committee and provides for an orderly 

transition. 

Finally, the bill clarifies the requirements for payment of commemorative coin surcharge revenues to beneficiary organizations. 

Legislative History 

H.R. 258 was introduced by Mr. Cantor on January 8, 2003, with 

10 original cosponsors and referred to the House Committee on Financial Services. On February 13, 2003, the Committee met to consider the bill and ordered the bill to be favorably reported, with an 

amendment, by a voice vote. On February 26, 2003, the Committee 

reported the bill to the House (H. Rept. 108–20) and the House 

passed the bill under suspension of the rules by a record vote of 

412 yeas and 5 nays. 

On February 27, 2003, H.R. 258 was received in the Senate and 

read twice and referred to the Committee on Banking, Housing, 

and Urban Affairs. On April 11, 2003, the Committee was discharged from the further consideration of the bill and the Senate 

passed the bill by unanimous consent, clearing the bill for the 

White House. 

H.R. 258 was presented to the President on April 15, 2003, and 

signed into law on April 23, 2003, becoming Public Law 108–15. 

DEPOSITARY SERVICES EFFICIENCY AND COST REDUCTION ACT

Public Law 108–100 (H.R. 3183; H.R. 1474) 

To provide for direct and accurate compensation to financial institutions for providing various critical depositary and financial 

agency services for or on behalf of the United States, and for other 

purposes. 

Summary 

H.R. 3183, the Depositary Services Efficiency and Cost Reduction 

Act, virtually eliminates the Department of Treasury’s program to 

36

place Federal funds on deposit with certain financial institutions, 

in order to allow the imputed interest to offset fees that otherwise 

would be charged for depositary services rendered to the Federal 

government. The result is to provide a more cost effective and 

transparent system for compensating financial institutions for their 

services. This legislation provides for an orderly transition between 

the old method and the new and provides for the return to the old 

method only in extraordinary circumstances. Further, the bill also 

makes technical changes in the way the Federal Reserve 

collateralizes currency put into circulation, a move designed to 

allow more liquidity in the case of another terror attack or disaster. 

Legislative History 

Mr. Oxley introduced H.R. 3183 on September 25, 2003, with one 

original cosponsor, and it was referred to the House Committee on 

Financial Services. The text of the measure was included as section 

19 of the conference report to accompany H.R. 1474. For further action on this measure, see the entry for H.R. 1474 in the Financial 

Institutions Subcommittee section of this report. 

NORTH AMERICAN DEVELOPMENT BANK

Public Law 108–215 (H.R. 254) 

To authorize the President of the United States to agree to certain amendments to the Agreement between the Government of the 

United States of America and the Government of the United Mexican States concerning the establishment of a Border Environment 

Cooperation Commission and a North American Development 

Bank, and for other purposes. 

Summary 

H.R. 254 makes two changes to the congressional charter of the 

North American Development Bank (NADBank). First, it authorizes the NADBank to make grants and non-market rate loans out 

of its paid-in capital resources with the approval of its Board of Directors, rather than only the market rate loans permitted under 

current law. Second, the bill expands the region that the NADBank 

serves on only the Mexican side from 100 kilometers of the international boundary line to within 300 kilometers of the international boundary line. 

H.R. 254 also requires the Department of the Treasury to submit 

an annual report on certain enumerated issues relating to the 

NADBank. Currently, no annual report is required from the Department of the Treasury on these subjects. Finally, the bill expresses the sense of Congress on four items related to the equitable 

distribution of the Water Conservation Fund. 

Legislative History 

On January 8, 2003, Mr. Bereuter introduced H.R. 254 with nine 

original cosponsors. On February 13, 2003, the Committee on Financial Services met in open session to consider H.R. 254 and ordered it reported to the House with a favorable recommendation, 

by a voice vote. The Committee on Financial Services reported H.R. 

254 to the House on February 25, 2003 (H. Rept. 108–17). 

37

On February 26, 2003, the House considered H.R. 254 under suspension of the rules, passing the bill by a voice vote. On February 

27, 2003, H.R. 254 was received in the Senate and read twice and 

referred to the Senate Committee on Foreign Relations. 

On March 12, 2004, the Senate Committee on Foreign Relations 

was discharged and the bill passed, with an amendment, by unanimous consent. On March 24, 2004, the House considered the Senate amendment under suspension of the rules. On March 25, 2004, 

the House concurred in the Senate amendment by a record vote of 

377 yeas and 48 nays, clearing the bill for the White House. 

The bill was presented to the President on March 30, 2004, and 

signed into law on April 5, 2004, becoming Public Law 108–215. 

2004 DISTRICT OF COLUMBIA OMNIBUS AUTHORIZATION ACT

Public Law 108–386 (H.R. 3797) 

To authorize improvements in the operations of the government 

of the District of Columbia, and for other purposes. 

Summary 

H.R. 3797, the first annual omnibus authorization bill for the 

District of Columbia, authorizes improvements in the operations of 

the government of the District of Columbia. Section 8 of the bill, 

transferring oversight of banks chartered by the District of Columbia from the Office of the Comptroller of the Currency to the Federal Deposit Insurance Corporation, is a matter within the jurisdiction of the Committee on Financial Services. 

Legislative History 

H.R. 3797 was introduced by Mr. Davis of Virginia on February 

11, 2004, with one original cosponsor, and was referred to the Committee on Government Reform and, in addition, to the Committees 

on Financial Services and Education and the Workforce. On June 

17, 2004, the Committee on Government Reform reported H.R. 

3797, as amended, to the House (H. Rept. 108–551), and the Committee on Financial Services and the Committee on Education and 

the Workforce were discharged from further consideration of H.R. 

3797. 

In exchange for the Committee on Government Reform’s agreement to make technical changes to section 8 requested by the Committee on Financial Services, the Committee agreed to waive consideration of H.R. 3797 in a March 9, 2004, exchange of letters between the Chairman of the Committee on Financial Services and 

the Chairman of the Committee on Government Reform. On June 

21, 2004, the House considered H.R. 3797 under suspension of the 

rules, and passed the bill by a voice vote. 

The bill was received in the Senate on June 22, 2004, read twice, 

and referred to the Senate Committee on Governmental Affairs. On 

July 21, 2004, the Senate Committee on Governmental Affairs ordered the bill to be reported favorably, without amendment. 

On October 11, 2004, the Senate Committee on Governmental Affairs was discharged from the further consideration of H.R. 3797 by 

unanimous consent, and on that same date, the bill passed the Senate without amendment by unanimous consent. The bill was preVerDate jul 14 2003 02:56 Jan 11, 2005 Jkt 039006 PO 00000 Frm 00043 Fmt 6601 Sfmt 6602 E:\HR\OC\HR802.XXX HR802
38

sented to the President on October 19, 2004, and signed into law 

on October 30, 2004, becoming Public Law 108–386. 

CONSOLIDATED APPROPRIATIONS ACT, 2005

Public Law 108–447 (H.R. 4818) 

Summary 

The following legislative provisions within the jurisdiction of the 

Committee on Financial Services were included in H.R. 4818, the 

Consolidated Appropriations Act, 2005: 

In division B, section 124 (relating to a 9/11 Medal of Valor), and 

a provisio under the Securities and Exchange Commission paragraph in title V (relating to a report on the final rule requiring an 

independent chairman for mutual funds); 

In division E, section 138 (relating to the eligibility of certain 

property for flood insurance), section 531 (relating to opposition to 

aid from the international financial institutions to Burma), section 

565 (relating to the authority of the President to reduce certain 

debt), and section 593 (relating to certain administrative provisions 

related to the multilateral development banks); and,

In division H, section 223 (relating to the Office of Terrorism and 

Financial Intelligence). 

Legislative History 

On July 13, 2004, the Committee on Appropriations reported 

H.R. 4818, the Foreign Operations, Export Financing, and Related 

Programs Appropriations Act, 2005, to the House as an original 

measure (H. Rept. 108–599). The House passed the measure on 

July 15, 2004, by a record vote of 365 yeas and 41 nays. 

On September 23, 2004, the Senate passed H.R. 4818 with an 

amendment by a voice vote. The conference report to accompany 

H.R. 4818 (H. Rept. 108–792), which was the vehicle for the Consolidated Appropriations Act, 2005, was filed in the House on November 20, 2004, and agreed to on the same day by a record vote 

of 344 yeas and 51 nays, 1 Member voting present. 

On November 20, 2004, the Senate agreed to the conference report by a roll call vote of 65 yeas and 30 nays. 

Pursuant to the provisions of H. Res. 866, the House was considered to have passed H. Con. Res. 528, correcting the enrollment of 

H.R. 4818 on November 20, 2004. That same day, the Senate 

passed H. Con. Res. 528, with an amendment by unanimous consent. 

On December 6, 2004, the House concurred in the Senate amendment to H. Con. Res. 528 by a record vote of 381 yeas and no nays, 

clearing H.R. 4818 for the White House. 

H.R. 4818 was presented to the President on December 7, 2004, 

and signed into law on December 8, 2004, becoming Public Law 

108–447. 

COMMUNITY BANKING MONTH

(H. Res. 591) 

Expressing the gratitude of the House of Representatives for the 

contributions made by America’s community banks to the Nation’s 

39

economic well-being and prosperity and the sense of the House of 

Representatives that a month should be designated as ‘‘Community 

Banking Month’’. 

Summary 

H. Res. 591 expresses the House of Representatives’ gratitude for 

the contributions made by America’s community banks to the Nation’s economic well-being and prosperity, and expresses the sense 

of the House that a ‘‘Community Banking Month’’ should be designated to raise public awareness of, and public appreciation for, 

the contributions of the helpful institutions that are our Nation’s 

community banks. 

Legislative History 

H. Res. 591 was introduced by Mr. Bachus on March 31, 2004, 

and was referred to the Committee on Financial Services. Pursuant 

to an exchange of letters between the Chairman of the Committee 

on Financial Services and the Chairman of the Committee on Government Reform and Oversight, the Chairman of the Committee on 

Government Reform and Oversight agreed not to seek a sequential 

referral of the resolution. On June 21, 2004, the House considered 

H. Res. 591 under suspension of the rules, and agreed to the resolution by a record vote of 364 yeas and no nays. 

MORTGAGE SERVICING CLARIFICATION ACT

(H.R. 314) 

To amend the Fair Debt Collection Practices Act to exempt mortgage servicers from certain requirements of the Act with respect to 

Federally related mortgage loans secured by a first lien, and for 

other purposes. 

Summary 

H.R. 314, the Mortgage Servicing Clarification Act, amends the 

Fair Debt Collection Practices Act to exempt servicers of Federally 

related first lien mortgages from certain notice requirements that 

apply to third-party debt collectors. 

Legislative History 

H.R. 314 was introduced on January 8, 2003, by Mr. Royce and 

seven original cosponsors, and referred to the Committee on Financial Services. On February 27, 2003, H.R. 314 was referred to the 

Subcommittee on Financial Institutions and Consumer Credit. 

On March 18, 2003, the House considered H.R. 314 under suspension of the rules. On March 19, 2003, the House passed the bill 

by a record vote of 424 yeas and no nays. On March 20, 2003, H.R. 

314 was received in the Senate, read twice, and referred to the 

Committee on Banking, Housing, and Urban Affairs. 

No further action was taken on this measure in the 108th Congress. 

40

SECONDARY MORTGAGE MARKET ENTERPRISES REGULATORY

IMPROVEMENT ACT

(H.R. 2575)

To reform the regulation of certain housing-related Governmentsponsored enterprises, and for other purposes. 

Summary 

H.R. 2575 creates a new regulatory agency charged with oversight of government sponsored enterprises (GSEs), Fannie Mae and 

Freddie Mac. The bill abolishes the current GSE regulator, the Office of Federal Housing Enterprise Oversight, and merges its duties 

with those of the Office of Thrift Supervision. The newly formed 

agency is renamed the Office of Housing Finance Supervision. H.R. 

2575 grants the new GSE regulator authorities similar to banking 

regulators. These authorities include: the ability to set minimum 

and risk based capital levels; the power to take prompt corrective 

action against a troubled enterprise; and the ability to bring both 

civil and criminal penalties against the enterprises for violations of 

the law. The Secretary of HUD is granted prior approval of new activities as well as the ability to set and adjust the GSE housing 

goals. 

Legislative History 

On June 24, 2003, Mr. Baker introduced H.R. 2575 with twenty 

original cosponsors. On September 25, 2003, the full Committee 

held a hearing on the bill and on the Administration’s proposal for 

improved GSE regulation. No further action was taken on this 

measure during the 108th Congress. 

9/11 RECOMMENDATIONS IMPLEMENTATION ACT

(H.R. 10; S. 2845) 

To provide for reform of the intelligence community, terrorism 

prevention and prosecution, border security, and international cooperation and coordination, and for other purposes. 

Summary 

The portions of H.R. 10 within the jurisdiction of the Committee 

on Financial Services authorize new funding for the fight against 

the financing of terror, give the government new tools to fight the 

funding of terrorism, take steps both to help prevent an attack on 

the financial system and to make the system and markets more resilient in case of another attack, and establish tools to improve 

international cooperation in the fight against terror funding. 

Among the major elements of the legislation are: additional authorizations for the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), to reduce the Bank Secrecy Act compliance burden on financial institutions while significantly increasing 

the usefulness of FinCEN’s data to law enforcement; a reauthorization of apporiations for 2 additional fiscal years of the Money Laundering and Financial Crimes Strategy Act of 1998, as well as a twoyear reauthorization of the National Strategy required under that 

Act; a series of purely technical corrections to the anti-terror fiVerDate jul 14 2003 02:56 Jan 11, 2005 Jkt 039006 PO 00000 Frm 00046 Fmt 6601 Sfmt 6602 E:\HR\OC\HR802.XXX HR802
41

nance title of the USA PATRIOT Act; authority for the Treasury 

Department to help countries strengthen their own currencies 

against counterfeiting; provisions providing for post-employment 

restrictions for certain bank, thrift, and credit union examiners to 

avoid conflicts of interests in the event these examiners are subsequently employed by a financial institution they oversaw as examiners; and language aimed at improving international cooperation 

to combat the financing of terror, including a requirement for the 

Treasury Secretary to report annually on anti-terrorist financing 

initiatives and language supporting codification of interagency cooperation before international sessions held to set standards for 

anti-terrorist financing. 

Legislative History 

On September 24, 2004, the Speaker introduced H.R. 10, with 16 

original cosponsors. The bill was referred to the House Permanent 

Select Committee on Intelligence, and in addition to the Committees on Armed Services, Education and the Workforce, Energy and 

Commerce, Financial Services, Government Reform, International 

Relations, the Judiciary, Rules, Science, Transportation and Infrastructure, Ways and Means, and the Select Committee on Homeland Security. 

On September 22, 2004, the Committee on Financial Services 

held a legislative hearing on proposals to implement those recommendations of the National Commission on Terrorist Attacks 

Upon the United States that fell within the Committee’s jurisdiction. On September 29, 2004, the Committee on Financial Services 

met in open session, and ordered H.R. 10 reported to the House, 

with an amendment, by a voice vote. 

On October 4, 2004, the Committee on Financial Services reported H.R. 10 to the House (H. Rept. 108–724, Part III), as did 

the House Permanent Select Committee on Intelligence (H. Rept. 

108–724, Part I) and the Committee on Armed Services (H. Rept. 

108–724, Part II). On October 5, 2004, reports on H.R. 10 were 

filed by the Committee on Government Reform (H. Rept. 108–724, 

Part IV) and the Committee on the Judiciary (H. Rept. 108–724, 

Part V). On the same date, the Committees on Education and the 

Workforce, Energy and Commerce, International Relations, Rules, 

Science, Transportation and Infrastructure, Ways and Means, and 

Homeland Security (Select) were discharged from further consideration of H.R. 10. 

On October 7, 2004, the Committee on Rules reported a rule providing for the consideration of H.R. 10 (H. Res. 827). The House 

agreed to H. Res. 827 on October 7, 2004, by a voice vote. On October 7 and 8, 2004, the House considered H.R. 10 pursuant to the 

provisions of H. Res. 827. The legislation passed the House on October 8, 2004, by a record vote of 282 yeas and 134 nays. 

S. 2845, the National Intelligence Reform Act of 2004, was introduced by Senator Collins on September 23, 2004, and considered by 

the Senate on September 27 through October 4, 2004. The Senate 

agreed to invoke cloture on the measure on October 5, 2004, by a 

roll call vote of 85 yeas and 10 nays. On October 6, 2004, the Senate passed S. 2845 by a roll call vote of 95 yeas and 2 nays. 

42

On October 16, 2004, S. 2845 was received in the House, and 

pursuant to H. Res. 287, the House was considered to have passed 

S. 2845 with an amendment in the nature of a substitute consisting 

of the text of H.R. 10 as passed by the House, insisted on its 

amendment, and asked for a conference. The Speaker appointed 

Messrs. Hoekstra, Dreier, Hyde, Hunter, Sensenbrenner, Harman, 

Menendez, and Skelton as conferees on the part of the House. That 

day the Senate disagreed to House amendment, agreed to the request for a conference, and appointed conferees: Senators Collins, 

Lott, DeWine, Roberts, Voinovich, Sununu, Coleman, Lieberman, 

Levin, Durbin, Rockefeller, Graham of Florida, and Lautenberg. 

On October 17, 2004 the conferees met, the House chairing. 

On December 7, 2004, the conference report to accompany S. 

2845 was received in the House (H. Rept. 108–796). That day, the 

House passed H. Res. 870, a rule providing for the consideration 

of the conference report, by a voice vote. The House agreed to the 

conference report to accompany S. 2845 by a record vote of 336 

yeas and 75 nays. On December 8, 2004, the conference report was 

agreed to by the Senate by a record vote of 89 yeas and 2 nays, 

clearing S. 2845 for the White House. 

On December 15, 2004, the bill was presented to the President, 

and signed into law on December 17, 2004, becoming Public Law 

108–458. 

FULL COMMITTEE OVERSIGHT ACTIVITIES

MONETARY AND ECONOMIC POLICY

On February 12 and July 15, 2003, and February 11 and July 

21, 2004, the Committee received testimony from the Chairman of 

the Federal Reserve Board, the Honorable Alan Greenspan, on the 

conduct of monetary policy. The report continued a tradition of 

twice-yearly reports by the Fed Chairman to the committees of jurisdiction in the House and Senate that formerly were referred to 

as ‘‘Humphrey-Hawkins’’ hearings after the act that required the 

testimony. 

Additionally, on April 30, 2003, the Committee held an additional hearing to hear Chairman Greenspan’s testimony on United 

States’ monetary and economic policy. In addition to Chairman 

Greenspan’s testimony, the Committee heard testimony from several other economists regarding the state of the economy. 

REMITTANCES: REDUCING COSTS, INCREASING COMPETITION, AND

BROADENING ACCESS TO THE MARKET

On October 1, 2003, the Committee on Financial Services held a 

hearing to review developments in the market for international remittances. The United States has become the largest source of remittances in the world, with over $28 billion in payments originating within its borders annually. This hearing examined the 

trends toward greater competition and lower costs for consumers in 

the remittances market, and highlighted innovative products that 

may help to expand consumers’ access to low-cost remittance services. The hearing featured testimony from a senior Treasury Department official, and representatives of financial institutions and 

43

organizations dedicated to promoting stronger U.S.-Latin American 

ties. 

HUD PROPOSED BUDGET FOR FISCAL YEAR 2004

The Committee on Financial Services held a hearing on Wednesday, March 5, 2003, to review housing programs under its jurisdiction, which includes the Department of Housing and Urban Development (HUD), the National Flood Insurance Program, the Rural 

Housing Service, and the Neighborhood Reinvestment Corporation. 

The Administration proposed $31.3 billion in FY 2004 budget authority for the Department of Housing and Urban Development 

(HUD). In releasing the President’s budget, the Secretary of Housing and Urban Development stated that the budget request builds 

upon the Administration’s commitment to address the minority 

homeownership gap, the availability and affordability of housing, 

and the need of the homeless. The Secretary of Housing and Urban 

Development was the only witness. 

STATE OF THE INTERNATIONAL FINANCIAL SYSTEM

On May 13, 2003, the House Financial Services Committee held 

a hearing on the annual report by the Secretary of the Treasury 

on the International Monetary Fund Reform and the state of the

International Financial System. The Secretary of the Treasury was 

the only witness. 

At this hearing, the Committee heard testimony from Secretary 

Snow on the following issues, among others: (1) the importance of 

promoting global growth through trade liberalization; (2) rebuilding 

Iraq and Afghanistan; (3) progress made in reforming the IMF; (4) 

the President’s proposed Millennium Challenge Account; (5) the requests to authorize the U.S. participation of the United States in 

the thirteenth replenishment of the IDA, the seventh replenishment of the Asian Development Fund and the ninth replenishment 

of the African Development Fund; (6) the request to authorize additional funds to the Highly Indebted Poor Country Trust Fund; and 

(7) the current Department of the Treasury legislative mandates 

and reports. 

On Thursday, March 24, 2003, the Committee on Financial Services held a hearing titled ‘‘The State of the International Financial 

System.’’ It focused on progress in reforming the International 

Monetary Fund (IMF) and the broader international financial system. The only hearing witness was the Secretary of the Treasury. 

Pursuant to Public Law 105–277, the Secretary of Treasury appears annually before the Committee to report on progress in reforming the International Monetary Fund (IMF) and the broader 

international financial system, as well as country compliance with 

IMF conditions for assistance. During the hearing, the Secretary 

stressed the Treasury Department’s efforts to promote economic 

growth and international trade. He noted that U.S. leadership of 

the G–7 has accelerated efforts to spur structural reforms and global economic growth through the ‘‘Agenda for Growth.’’ This is the 

first time that G–7 countries will identify specific initiatives to 

spur growth and then report on progress made on these initiatives. 

44

U.S.-E.U. REGULATORY DIALOGUE

On Thursday, May 13, 2004, the Committee on Financial Services held a full Committee hearing entitled, ‘‘The U.S.-E.U. Regulatory Dialogue and Its Future.’’ The Committee heard testimony 

from representatives from the Department of the Treasury, the European Union, and the functional regulators. Building on the Committee’s May 2002 hearing on the European Union’s Financial 

Services Action Plan (FSAP), the hearing focused on how the regulatory dialogue is evolving. 

OVERSIGHT OF THE OFFICE OF THE COMPTROLLER OF THE CURRENCY

On April 1, 2004, the Committee on Financial Services held an 

oversight hearing on the operations of the Office of the Comptroller 

of the Currency (OCC). The hearing focused on the state of the national banking industry; the effects of industry consolidation on the 

OCC’s regulatory oversight of national banks; the OCC’s efforts to 

maintain a qualified examination force; regulations issued by the 

OCC governing the extent to which State laws apply to the activities of banks chartered by the Federal government; and concerns 

about the impact of the proposed Basel capital accord on the U.S. 

banking system. The Comptroller of the Currency, was the sole witness. 

SARBANES-OXLEY IMPLEMENTATION

On September 17, 2003, the Committee on Financial Services 

held a hearing entitled ‘‘Accounting under Sarbanes-Oxley: Are Financial Statements More Reliable?’’ The hearing focused on the 

Public Company Accounting Oversight Board (PCAOB), created 

under Sarbanes-Oxley to serve as the primary regulator for auditors of public companies. Under Sarbanes-Oxley, the PCAOB is required to (1) register public accounting firms; (2) establish auditing, quality control and ethics standards proposed by a designated 

professional group of accountants; (3) inspect registered accounting 

firms; and (4) conduct investigations and disciplinary proceedings 

and impose sanctions upon registered firms and accountants. 

The Securities and Exchange Commission (SEC) has oversight 

and enforcement authority over the PCAOB. No rule of the PCAOB 

can take effect until approved by the SEC. Providing testimony to 

the Committee on the role and operations of the PCAOB were SEC 

Chairman William H. Donaldson and PCAOB Chairman William J. 

McDonough. 

On July 22, 2004, the Committee on Financial Services held a 

hearing entitled ‘‘Sarbanes-Oxley: Two Years of Market and Investor Recovery.’’ The focus of the hearing was on the impact of Sarbanes-Oxley upon public companies and auditing firms. Testimony 

revealed that companies are taking much more care in preparing 

their financial statements and that the audit, much neglected in 

the 1990s, has regained its place as the central focus for accounting 

firms. In addition, corporate directors, particularly those on the 

audit, nominating, and governance committees, are now more engaged. 

Testimony also disclosed complaints about the increased costs associated with compliance. The most frequent criticism involved the 

45

internal control standard of section 404 of the Sarbanes-Oxley Act 

and the increased auditing and legal costs resulting from this provision. The Committee heard testimony from a number of privatesector experts on the benefits of the provisions of Sarbanes-Oxley.

ACCOUNTING AT SHELL OIL

On July 21, 2004, the Committee on Financial Services held a 

hearing entitled ‘‘Shell Games: Corporate Governance and Accounting for Oil and Gas Reserves.’’ The purpose of the hearing was to 

understand the accounting problems uncovered at Royal Dutch/

Shell Group (Shell). On July 2, 2004, Shell, the world’s third largest publicly traded oil company, announced in a filing with the Securities and Exchange Commission that it had overstated profits by 

$276 million over the past several years. The accounting problems 

were triggered by massive overbooking of oil and natural-gas ‘‘proven’’ reserves, the most precious asset of an oil company. Testifying 

before the full Committee were representatives from an institutional investor, an oil and gas investment banking boutique, and 

academia. 

THE 9/11 COMMISSION REPORT: IDENTIFYING AND PREVENTING

TERRORIST FINANCING

On August 23, 2004, the Committee on Financial Services held 

a hearing to examine those findings and recommendations of the 

National Commission on Terrorist Attacks upon the United States 

(9/11 Commission) that related to terrorist financing and other 

matters within the Committee’s jurisdiction. In its report and testimony before the Committee, the 9/11 Commission urged that efforts to combat the financing of terrorist organizations remain a 

high priority of the United States government. Witnesses testifying 

at the hearing included the Vice Chairman of the 9/11 Commission, 

as well as representatives of the Department of the Treasury, Department of Homeland Security, and Department of Justice. 

PROTECTING OUR NATION’S FINANCIAL INFRASTRUCTURE

On September 8, 2004, the Committee on Financial Services held 

a hearing entitled ‘‘Protecting Our Financial Infrastructure: Preparation and Vigilance.’’ The hearing examined efforts to protect the 

human, technical, and physical resources essential to the functioning of the financial services sector. The Committee heard testimony from the financial regulators and organizations representing 

the major market sectors. 

REGULATION OF GOVERNMENT SPONSORED ENTERPRISES

On September 10, 2003, the Committee on Financial Services 

held a hearing entitled, ‘‘Treasury Department Views on the Regulation of Government Sponsored Enterprises.’’ The Committee received testimony on recommended improvements to the regulatory 

oversight of the GSEs following the accounting irregularities and 

management reorganization at Freddie Mac. The Secretary of the 

Treasury and the Secretary of the Department of Housing and 

Urban Development testified at this hearing. 

46

BANKS, MERGERS, AND THE AFFECTED COMMUNITIES

On December 14, 2004, the Committee on Financial Services held 

a field hearing in Boston, Massachusetts entitled ‘‘Banks, Mergers, 

and the Affected Communities. The hearing examined the extent to 

which the current laws governing mergers provide sufficient criteria to fully examine the potential impact of those mergers on 

local communities, as well as whether those laws are adequate to 

ensure that those communities’ interests are protected once the 

merger has been completed. Witnesses also discussed the status of 

any community investment pledges made by the acquiring financial 

institution during the merger process and the effects of those mergers on jobs with, and employees of, the financial institutions. The 

Committee heard testimony from representatives of community 

groups, financial institutions, and State officials. 

HEARINGS HELD

Monetary Policy and the State of the Economy. Hearing to receive 

the testimony of the Chairman of the Federal Reserve Board of 

Governors on monetary policy and the state of the economy. February 12, 2003. PRINTED, serial no., 108–1. 

H.R. 522, the Federal Deposit Insurance Reform Act of 2003.

Hearing on H.R. 522, the Federal Deposit Insurance Reform Act of 

2003. March 4, 2003. PRINTED, serial no. 108–6. 

Housing Related Agency Budgets for FY 2004. Hearing entitled 

‘‘Housing Related Agency Budgets for FY 2004.’’ March 5, 2004. 

PRINTED, serial no. 108–7. 

United States Monetary and Economic Policy. Hearing to receive 

the testimony of the Chairman of the Federal Reserve Board of 

Governors on the United States monetary and economic policy. 

April 30, 2003. PRINTED, serial no. 108–24. 

State of International Financial System, IMF Reform, and Compliance with IMF Agreements. Hearing entitled ‘‘The State of the 

International Financial System, IMF Reform, and Compliance with 

IMF Agreements.’’ May 13, 2003. PRINTED, serial no. 108–27. 

H.R. 2622, the Fair and Accurate Credit Transactions Act of 

2003. Hearing on H.R. 2622, the Fair and Accurate Credit Transactions Act of 2003. July 9, 2003. PRINTED, serial no. 108–47.

Monetary Policy and the State of the Economy. Hearing to receive 

the testimony of the Chairman of the Federal Reserve Board of 

Governors on monetary policy and the state of the economy. July 

15, 2003. PRINTED, serial no. 108–48. 

Treasury Department Views on the Regulation of Government 

Sponsored Enterprises. Hearing to receive the testimony of the Secretary of the Treasury and the Secretary of the Department of 

Housing and Urban Development on GSE regulation. September 

10, 2003. PRINTED, serial no, 108–51. 

Accounting under Sarbanes-Oxley: Are Financial Statements 

More Reliable? Hearing entitled ‘‘Accounting under SarbanesOxley: Are Financial Statements More Reliable?’’ September 17, 

2003. PRINTED, serial no. 108–52. 

H.R. 2575, the Secondary Mortgage Market Enterprises Regulatory Improvement Act and the Administration’s proposals on GSE 

47

Regulation. Hearing on changes to the regulatory oversight of the 

GSEs. September 25, 2003. PRINTED, serial no, 108–54. 

Remittances: Reducing Costs, Increasing Competition, and Broadening Access to the Market. Hearing entitled ‘‘Remittances: Reducing Costs, Increasing Competition, and Broadening Access to the 

Market.’’ October 1, 2003. PRINTED, serial no. 108–55. 

Monetary Policy and the State of the Economy. Hearing to receive 

the testimony of the Chairman of the Federal Reserve Board of 

Governors on monetary policy and the state of the economy. February 11, 2004. PRINTED, serial no, 108–67. 

State of the International Financial System. Hearing held to receive the annual testimony of the Secretary of the Treasury regarding the state of the international financial system and efforts to reform multilateral financial institutions. March 25, 2004. PRINTED, 

serial no. 108–75. 

Oversight of the Office of the Comptroller of the Currency. Hearing entitled ‘‘Oversight of the Office of the Comptroller of the Currency.’’ April 1, 2004. PRINTED, serial no. 108–78. 

The U.S.-E.U. Regulatory Dialogue and Its Future. Hearing to receive testimony from U.S. federal financial regulators and the European Commission regarding the state of transatlantic regulatory 

cooperation. May 13, 2004. PRINTED, serial no. 108–86. 

Oversight of HUD. Hearing entitled ‘‘Oversight of the Department of Housing and Urban Development.’’ May 20, 2004. PRINTED, serial no. 108–89. 

Monetary Policy and the State of the Economy. Hearing to receive 

the testimony of the Chairman of the Federal Reserve Board of 

Governors on monetary policy and the state of the economy. July 

21, 2004. PRINTED, serial no. 108–104. 

Shell Games: Corporate Governance and Accounting for Oil and 

Gas Reserves. Hearing entitled ‘‘Shell Games: Corporate Governance and Accounting for Oil and Gas Reserves.’’ July 21, 2004. 

PRINTED, serial no. 108–105. 

Sarbanes/Oxley: Two Years of Market and Investor Recovery.

Hearing entitled ‘‘Sarbanes/Oxley: Two Years of Market and Investor Recovery.’’ July 22, 2004. PRINTED, serial no. 108–106. 

The 9/11 Commission Report: Identifying and Preventing Terrorist Financing. Hearing on the Final Report of the National Commission on Terrorist Attacks upon the United States. August 23, 

2004. Serial no. 108–107. 

Protecting our Financial Infrastructure: Preparation and Vigilance. Hearing entitled ‘‘Protecting our Financial Infrastructure: 

Preparation and Vigilance.’’ September 8, 2004. Serial no. 108–108. 

Legislative Proposals to Implement the Recommendations of the 

9/11 Commission. Hearing entitled ‘‘Legislative Proposals to Implement the Recommendations of the 9/11 Commission.’’ September 

22, 2004. Serial no. 108–112. 

Banks, Mergers, and the Affected Communities. Field hearing entitled ‘‘Banks, Mergers, and the Affected Communities.’’ December 

14, 2004, Boston, Massachusetts. Serial no. 108–117.

(49)

SUBCOMMITTEE ON CAPITAL MARKETS, INSURANCE, AND

GOVERNMENT SPONSORED ENTERPRISES

(Ratio: 26–23)

RICHARD H. BAKER, Louisiana, Chairman

DOUG OSE, California 

Vice Chairman

CHRISTOPHER SHAYS, Connecticut 

PAUL E. GILLMOR, Ohio 

SPENCER BACHUS, Alabama 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

FRANK D. LUCAS, Oklahoma 

EDWARD R. ROYCE, California 

DONALD A. MANZULLO, Illinois 

SUE W. KELLY, New York 

ROBERT W. NEY, Ohio 

JOHN B. SHADEGG, Arizona 

JIM RYUN, Kansas 

VITO FOSSELLA, New York 

JUDY BIGGERT, Illinois 

MARK GREEN, Wisconsin 

GARY G. MILLER, California 

PATRICK J. TOOMEY, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

MELISSA A. HART, Pennsylvania 

MARK R. KENNEDY, Minnesota 

PATRICK J. TIBERI, Ohio 

GINNY BROWN-WAITE, Florida 

KATHERINE HARRIS, Florida 

RICK RENZI, Arizona 

MICHAEL G. OXLEY, Ohio 

ex officio

PAUL E. KANJORSKI, Pennsylvania 

GARY L. ACKERMAN, New York 

DARLENE HOOLEY, Oregon 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

JAY INSLEE, Washington 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

HAROLD E. FORD, JR., Tennessee 

RUBE ́ N HINOJOSA, Texas 

KEN LUCAS, Kentucky 

JOSEPH CROWLEY, New York 

STEVE ISRAEL, New York 

MIKE ROSS, Arkansas 

WM. LACY CLAY, Missouri 

CAROLYN MCCCARTHY, New York 

JOE BACA, California 

JIM MATHESON, Utah 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

RAHM EMANUEL, Illinois 

DAVID SCOTT, Georgia 

NYDIA M. VELA ́ ZQUEZ, New York 3

BARNEY FRANK, Massachusetts 

ex officio

LEGISLATIVE ACTIVITIES

ACCOUNTANT, COMPLIANCE AND ENFORCEMENT STAFFING ACT OF 2003

Public Law 108–44 (H.R. 658, S. 496) 

To provide for the protection of investors, increase confidence in 

the capital markets system, and fully implement the SarbanesOxley Act of 2002 by streamlining the hiring process for certain 

employment positions in the Securities and Exchange Commission. 

Summary 

H.R. 658, the Accountant, Compliance, and Enforcement Staffing 

Act of 2003, allows the Securities and Exchange Commission (SEC) 

to more quickly fill critical accountant, securities compliance examiner, and economist positions with the best possible candidates on 

an expedited basis. The legislation authorizes the SEC to exempt 

accountant, securities compliance examiner, and economist positions from competitive service requirements (as SEC staff attorneys 

are currently), thus alleviating the significant delay in the recruitVerDate jul 14 2003 02:56 Jan 11, 2005 Jkt 039006 PO 00000 Frm 00055 Fmt 6601 Sfmt 6602 E:\HR\OC\HR802.XXX HR802
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ment and hiring of those positions caused by those requirements. 

This enhanced authority enables the SEC to fill a large number of 

new positions quickly, and to adequately respond to future staff attrition. 

Legislative History 

H.R. 658 was introduced in the House by Mr. Baker and one 

original cosponsor on February 11, 2003. The bill was referred to 

the Committee on Financial Services, and in addition to the Committee on Government Reform. Within the Committee on Financial 

Services, the bill was referred to the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises on February 27, 2003. 

The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing on March 6, 2003, and 

heard from the SEC and the National Treasury Employees Union 

regarding the merits of the legislation. On March 20, 2003, the 

Subcommittee met in open session and approved the bill for full 

Committee consideration, with an amendment, by a voice vote. The 

full Committee met on March 26, 2003, and ordered H.R. 658 reported to the House, with an amendment, with a favorable recommendation by a voice vote. 

On March 3, 2003, Senator Enzi introduced S. 496, companion 

legislation to H.R. 658. The bill was read twice and referred to the 

Senate Committee on Banking, Housing, and Urban Affairs. No 

further action was taken on S. 496 in the 108th Congress. 

On April 8, 2003, the Committee on Financial Services reported 

H.R. 658 to the House (H. Rept. 108–63, Part I) and the Committee 

on Government Reform was granted an extension for further consideration ending not later than June 2, 2003, when the Committee 

on Government Reform was discharged of the further consideration 

of the bill. 

On June 17, 2003, the House considered H.R. 658 under suspension of the rules and passed the bill by a record vote of 423 yeas 

and no nays. 

The bill was received in the Senate on June 18, 2003. On June 

19, 2003, the Senate passed the bill by unanimous consent, clearing 

the bill for the White House. H.R. 658 was presented to the President on June 24, 2003, and signed into law on July 3, 2003, becoming Public Law 108–44.

PERMITTING CHURCH PENSION PLANS TO BE INVESTED IN COLLECTIVE

TRUSTS

Public Law 108–359 (H.R. 1533) 

To amend the securities laws to permit church pension plans to 

be invested in collective trusts. 

Summary 

H.R. 1533 amends the Federal securities laws to grant church 

pension plans the ability to invest their assets in collective trust 

funds, providing parallel treatment under the securities laws for 

the assets of church pension plans and the assets of governmental 

pension plans. 

51

Legislative History 

H.R. 1533 was introduced in the House by Mrs. Biggert and one 

original cosponsor on April 1, 2003. The bill was referred to the 

Committee on Financial Services. H.R. 1533 was referred to the 

Subcommittee on Capital Markets, Insurance, and Government 

Sponsored Enterprises on April 10, 2003. 

The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises met in open session on July 10, 2003, 

and approved the bill for full Committee consideration by a voice 

vote. 

The full Committee met in open session on July 23, 2003, and 

ordered H.R. 1533 reported to the House with a favorable recommendation by a voice vote. H.R. 1533 was reported to the House 

on September 3, 2003 (H. Rept. 108–248). The House considered 

H.R. 1533 on September 3, 2003, under suspension of the rules, 

passing the bill by a record vote of 397 yeas and no nays. 

On September 4, 2003, H.R. 1533 was received in the Senate, 

read twice, and referred to the Senate Committee on Banking, 

Housing, and Urban Affairs. On October 1, 2004, the Senate Committee on Banking, Housing, and Urban Affairs was discharged 

from the further consideration of the bill and it passed the Senate, 

with an amendment, by unanimous consent. 

On October 8, 2004, the House concurred in the Senate amendment to H.R. 1533 by unanimous consent, clearing the bill for the 

White House. The bill was presented to the President on October 

13, 2004, and signed into law on October 25, 2004, becoming Public 

Law 108–359. 

MUTUAL FUNDS INTEGRITY AND FEE TRANSPARENCY ACT OF 2003 (H.R. 

2420)

To improve transparency relating to the fees and costs that mutual fund investors incur and to improve corporate governance of 

mutual funds. 

Summary 

H.R. 2420, the Mutual Funds Integrity and Fee Transparency 

Act of 2003, provides for enhanced disclosure and new controls and 

monitoring mechanisms over the mutual fund industry and establishes new rules on fund corporate governance. The bill’s major provisions include increasing independent board of directors’ members 

from the statutorially required 40 percent to two-thirds of the 

board and strengthening independence qualifications; requiring the 

investment adviser to submit reports to the board of directors on 

revenue sharing, directed brokerage, and soft dollar arrangements; 

imposing a fiduciary duty on board members to review such arrangements and requiring disclosure of such arrangements; requiring disclosure of conflicts of interest in the sale of preferred funds 

and share classes; requiring disclosure of portfolio management’s 

compensation structure and holdings; improving disclosure of fees 

and portfolio transaction costs; prohibiting fraudulent trading of 

fund shares by insiders; requiring adoption and oversight of compliance procedures and codes of ethics; requiring independent board 

certification of director oversight of portfolio management’s comVerDate jul 14 2003 02:56 Jan 11, 2005 Jkt 039006 PO 00000 Frm 00057 Fmt 6601 Sfmt 6602 E:\HR\OC\HR802.XXX HR802
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pensation, net asset value calculation, fund flows, and compliance 

with securities laws and code of ethics; banning joint management 

of hedge funds and mutual funds; banning market timing by fund 

insiders; and preventing late trading. 

Legislative History 

H.R. 2420 was introduced in the House by Mr. Baker and five 

original cosponsors on June 11, 2003. The bill was referred to the 

Committee on Financial Services. The bill was referred to the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises on June 18, 2003. 

The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing on H.R. 2420 on June 

18, 2003, regarding the merits of the legislation. The Subcommittee 

received testimony from the Securities and Exchange Commission, 

the General Accountability Office, and representatives from the 

mutual fund industry and an investor advocacy group. 

On July 23, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises was discharged from 

the further consideration of H.R. 2420, and the full Committee met 

in open session to consider the bill. H.R. 2420 was ordered reported 

to the House, with an amendment, with a favorable recommendation by a voice vote. 

H.R. 2420 was reported to the House on November 4, 2003 (H. 

Rept. 108–351). The House considered H.R. 2420 on November 19, 

2003, under suspension of the rules, and passed the bill by a record 

vote of 418 yeas and 2 nays. 

On November 20, 2003, H.R. 2420 was received in the Senate, 

read twice, and referred to the Senate Committee on Banking, 

Housing, and Urban Affairs. No further action was taken on this 

legislation in the 108th Congress. 

INCREASED CAPITAL ACCESS FOR GROWING BUSINESS ACT

(H.R. 3170) 

To amend the Investment Company Act of 1940 to provide incentives for small business investment, and for other purposes. 

Summary 

H.R. 3170, the Increased Capital Access for Growing Business 

Act, amends the Investment Company Act of 1940 to include as an 

eligible portfolio company an issuer of securities that: (1) does not 

have any class of equity securities listed for trading on a national 

exchange or market; or (2) has an aggregate value of outstanding 

publicly traded equity securities of not more than $250 million. 

The bill also amends the Investment Company Act of 1940 to 

permit a business development company to invest in a company 

that is not an eligible portfolio company because the aggregate 

value of its outstanding publicly traded equity securities is more 

than $250 million but not more than $500 million, as long as such 

securities represent no more than 10 percent of the total invested 

assets of the company, for purposes of meeting the statutory limitation on purchase of assets in other than eligible portfolio companies. 

53

Legislative History 

H.R. 3170 was introduced in the House by Mrs. Kelly and one 

original cosponsor on September 24, 2003. The bill was referred to 

the Committee on Financial Services. On October 3, 2003, the bill 

was referred to the Subcommittee on Capital Markets, Insurance, 

and Government Sponsored Enterprises. 

On April 28, 2004, the House considered H.R. 3170 under suspension of the rules and passed the bill by a voice vote. 

On April 29, 2004, H.R. 3170 was received in the Senate, read 

twice, and referred to the Committee on Banking, Housing, and 

Urban Affairs. No further action was taken on H.R. 3170 in the 

108th Congress. 

STOCK OPTION ACCOUNTING REFORM ACT

(H.R. 3574, S. 1890) 

To require the mandatory expensing of stock options granted to 

executive officers, and for other purposes. 

Summary 

H.R. 3574, the Stock Option Accounting Reform Act, amends the 

Securities Exchange Act of 1934 to require each public company to 

show as an expense in its annual report the fair value of all stock 

options granted after December 31, 2004, to the chief executive officer and the other four most highly compensated executives. The bill 

also requires that if an option valuation model is used, the volatility of the underlying stock shall be assumed to be zero. The bill 

grants a reprieve from expensing options of the chief executive officer and other four most highly compensated executives to newly 

registered public companies for their initial three years and all 

small business issuers. 

In addition, the bill amends the Securities Act of 1933 to prohibit 

the Securities and Exchange Commission (SEC) from recognizing 

as ‘‘generally accepted’’ any accounting principle relating to the expensing of stock options until the completion, within one year of 

the date of enactment, of a joint study by the Secretaries of Commerce and of Labor of the economic impact of the mandatory expensing of employee stock options. 

The bill further directs the SEC to require each public company 

to include in its annual and quarterly reports more detailed information regarding stock option plans, stock purchase plans, and 

other employee equity arrangements, including a discussion of the 

dilutive effect of stock option plans. 

Legislative History 

H.R. 3574 was introduced in the House by Mr. Baker and seven 

original cosponsors on November 21, 2003. The bill was referred to 

the Committee on Financial Services. The bill was referred to the 

Subcommittee on Capital Markets, Insurance, and Government 

Sponsored Enterprises on December 2, 2003. 

The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a legislative hearing on March 3, 

2004. The Subcommittee received testimony from representatives of 

small business and venture capital communities, an executive and 

54

an employee from public companies which grant employee stock options, and leaders of a pension fund and labor unions. 

The Subcommittee met in open session on May 12, 2004, and approved the bill for full Committee consideration, as amended, by a 

voice vote. The full Committee met on June 3 and 15, 2004, and 

ordered H.R. 3574 reported to the House, with an amendment, 

with a favorable recommendation by a record vote of 45 yeas and 

13 nays. 

On July 15, 2004, the Committee on Financial Services reported 

H.R. 3574 to the House (H. Rept. 108–609, Part I), and the bill was 

sequentially referred to the Committee on Energy and Commerce. 

On July 16, 2004, the Committee on Energy and Commerce was 

discharged of the further consideration of the bill. 

On July 19, 2004, the Committee on Rules met and reported a 

modified closed rule providing for consideration of H.R. 3574 (H. 

Res. 725). On July 20, 2004, H. Res. 725 passed the House by a 

voice vote. 

On July 20, 2004, the House considered H.R. 3574 under the provisions of rule H. Res. 725, and passed the bill by a record vote of 

312 yeas and 111 nays. 

The bill was received in the Senate on July 21, 2004. On September 7, 2004, the bill was read twice and referred to the Senate 

Committee on Banking, Housing, and Urban Affairs. 

On November 19, 2003, Senator Enzi introduced S. 1890, companion legislation to H.R. 3574. The bill was read twice and referred to the Senate Committee on Banking, Housing, and Urban 

Affairs. 

No further action was taken on either measure in the 108th Congress. 

MILITARY PERSONNEL FINANCIAL SERVICES PROTECTION ACT

(H.R. 5011) 

To prevent the sale of abusive insurance and investment products to military personnel. 

Summary 

H.R. 5011, the Military Personnel Financial Services Protection 

Act, addresses the abusive sales of financial products of dubious 

value to members of the armed services. To curb the sale of unsuitable securities products, this legislation amends the Investment 

Company Act of 1940 to make it unlawful, 30 days after the enactment of this legislation, to sell periodic payment plan certificates, 

also called contractual plans. The contractual plan is an investment product with a front-end sales load of 50 percent assessed 

against the first year of contributions that has all but disappeared 

from the civilian market. 

In addition, the bill provides investors with online access to information, including disciplinary actions, regarding broker-dealers. 

The legislation requires NASD to continue to maintain a system for 

collecting and retaining registration information regarding its 

member securities firms and their brokers, which NASD currently 

does through the Central Registration Depository, and to continue 

to provide toll-free telephone access, and begin to provide Internet 

55

or other access to this information. The bill also provides NASD 

with an appropriate limitation of liability in its maintenance of 

such a system. 

To prevent the abusive sales of insurance products, this bill applies any authority of a State insurance department to activities of 

insurers or agents on a U.S. military installation or any Federal 

land or facility, except to the extent that the authority directly conflicts with any applicable authorized Federal regulation or directive. The legislation further directs each State to implement standards to protect members of the Armed Forces, while on a military 

installation or any Federal land or facility, from dishonest and 

predatory insurance sales practices; and until a State has implemented such standards, life insurance may not be sold to any member without prior disclosure that subsidized life insurance may be 

available from the Federal Government and the State may not license or renew the license of any entity that has violated such prohibition. 

Legislative History 

H.R. 5011 was introduced in the House by Mr. Burns and four 

original cosponsors on September 7, 2004. The bill was referred to 

the Committee on Financial Services. The Committee on Financial 

Services met in open session on September 29, 2004, and ordered 

H.R. 5011 reported to the House, as amended, with a favorable recommendation by a record vote of 68 yeas and no nays. Pursuant 

to an exchange of letters on October 4, 2004, the Committee on 

Armed Services agreed not to seek a sequential referral of the bill, 

based on an amendment adopted by the Committee on Financial 

Services. 

H.R. 5011 was reported to the House on October 5, 2004 (H. 

Rept. 108–725). On October 5, 2004, the House considered H.R. 

5011 under the suspension of the rules and passed the bill by a 

record vote of 396 yeas and 2 nays. 

On October 6, 2004, H.R. 5011 was received in the Senate, read 

twice, and referred to the Senate Committee on Banking, Housing, 

and Urban Affairs. No further action was taken on this legislation 

in the 108th Congress.

BROKER ACCOUNTABILITY THROUGH ENHANCED TRANSPARENCY ACT

OF 2003

(H.R. 957, H.R. 2179, H.R. 5011) 

To enhance investor confidence by providing investors with easy 

online access to complete information about securities firms and 

their brokers. 

Summary 

H.R. 957, the Broker Accountability through Enhanced Transparency Act of 2003, requires NASD to continue to maintain a system for collecting and retaining registration information regarding 

its member securities firms and their brokers, which NASD currently does through the Central Registration Depository, and to 

continue to provide toll-free telephone access, and begin to provide 

Internet or other access to this information. The bill also provides 

56

NASD with an appropriate limitation of liability in its maintenance 

of such a system. 

Legislative History 

H.R. 957 was introduced in the House by Mr. Renzi and two 

original sponsors on February 27, 2003. The bill was referred to the 

Committee on Financial Services. On March 6, 2003, the bill was 

referred to the Subcommittee on Capital Markets, Insurance, and 

Government Sponsored Enterprises. 

The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a legislative hearing on March 6, 

2003, and heard testimony from NASD regarding the merits of the 

legislation. 

While no further action was taken on this measure in the 108th 

Congress, similar provisions were included in section 11 of H.R. 

2179, the Securities Fraud Deterrence and Investor Restitution Act 

of 2003, and section 4 of H.R. 5011, the Military Personnel Financial Services Protection Act. For further action, see the entries for 

those bills. 

SECURITIES FRAUD DETERRENCE AND INVESTOR RESTITUTION ACT OF

2003

(H.R. 2179) 

To enhance the authority of the Securities and Exchange Commission to investigate, punish, and deter securities laws violations, 

and to improve its ability to return funds to defrauded investors, 

and for other purposes. 

Summary 

H.R. 2179, the Securities Fraud Deterrence and Investor Restitution Act of 2003, enhances the ability of the SEC to investigate and 

deter fraud, levy and collect fines and disgorgement funds, and provides for a significant increase in the monies available for return 

to injured investors. The bill’s major provisions include excluding 

the SEC’s securities fraud judgments from state law property exemptions; permitting the SEC to impose civil money penalties in 

cease-and-desist proceedings, with a right of judicial review by the 

court of appeals; raising maximum penalties for securities fraud 

from $600,000 to $2 million; giving the SEC the express authority 

to contract with private collection attorneys; expanding the use of 

the FAIR Fund provision of the Sarbanes-Oxley Act of 2002 to 

allow any civil penalty monies obtained in an SEC action to be 

used for distribution for victims; providing that the SEC will seek 

to produce a joint study in cooperation with an association of State 

securities regulators on improving coordination and cooperation between the SEC and State securities regulators; providing investors 

with online access to information, including disciplinary actions, regarding broker-dealers; and authorizing the SEC to use undistributed portions of disgorgement funds established under the Sarbanes-Oxley Act of 2002 for investor education, and requiring mutual funds which do not have an independent chair to appoint a 

lead independent director. 

57

Legislative History 

H.R. 2179 was introduced in the House by Mr. Baker and four 

original cosponsors on May 21, 2003. The bill was referred to the 

Committee on Financial Services. The bill was referred to the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises on June 9, 2003. 

The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a legislative hearing on June 5, 

2003. The SEC, NASD, and the North American Securities Administrators Association testified at the hearing. 

The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises met in open session on July 10, 2003, 

and approved H.R. 2179 for full Committee consideration, as 

amended, by a voice vote. 

The full Committee met in open session on February 25, 2004, 

to consider the legislation, and ordered H.R. 2179 favorably reported to the House, with an amendment, by a voice vote. The 

Committee on Financial Services reported the bill to the House, 

with an amendment, on April 27, 2004 (H. Rept. 108–475, Part I). 

The Committee on the Judiciary received a sequential referral 

through June 1, 2004.

On June 1, 2004, the Committee on the Judiciary was discharged 

from the further consideration of the bill. No further action was 

taken on this measure in the 108th Congress. 

TERRORISM INSURANCE BACKSTOP EXTENSION ACT OF 2004

(H.R. 4634) 

To extend the terrorism insurance program of the Department of 

the Treasury. 

Summary 

H.R. 4634, the Terrorism Insurance Backstop Extension, extends 

the Program created by the Terrorism Risk Insurance Act (TRIA) 

for two years, requires terrorism insurance coverage to be ‘‘made 

available’’ for the entire duration of the Program, and adds group 

life insurance coverage to the Program. It maintains the gradual 

increase in the Program’s taxpayer protections as provided in existing law, and continues the slow phase-out of the Program by increasing taxpayer reimbursements from $15 billion in Program 

Year 3 to $17.5 billion in Year 4 and $20 billion in Year 5. The legislation also maintains the Program’s steady increases in insurer 

deductibles, stopping the deductible at 15 percent in Program Year 

4 while continuing the Program’s phase-out with a 20 percent deductible in Program Year 5. H.R. 4634 also requires the Treasury 

Department to report on long-term solutions for expanding the 

availability and affordability of terrorism insurance without a Federal backstop, and requires the Government Accountability Office 

to report on the Program’s effectiveness, the capacity of insurers to 

offer terrorism insurance after TRIA expires, and the availability 

of terrorism insurance for various policyholders. 

58

Legislative History 

H.R. 4634 was introduced on June 22, 2004 by Mr. Sessions and 

four original cosponsors and referred to the Committee on Financial Services. On June 28, 2004, the bill was referred to the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. 

The Chairman discharged the Subcommittee from the further 

consideration of the bill on September 24, 2004. On September 29, 

2004, the Committee met in open session and ordered H.R. 4634 

reported to the House, with an amendment, by a voice vote. 

On November 18, 2004, the Committee on Financial Services reported the bill to the House, with an amendment (H. Rept. 108–

780). 

No further action was taken on this measure in the 108th Congress. 

OVERSIGHT ACTIVITIES

MUTUAL FUND INDUSTRY PRACTICES

On March 12, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing 

entitled ‘‘Mutual Fund Industry Practices and Their Effect on Individual Investors.’’ The purpose of the hearing was to examine the 

practices of the mutual fund industry. In particular, the Subcommittee examined the costs associated with mutual fund ownership, which often are not transparently disclosed, and fund corporate governance. Testifying before the Subcommittee were current and former executives from the mutual fund industry, and an 

investor advocate. 

On November 4 and 6, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held two 

days of hearings entitled ‘‘Mutual Funds: Who’s Looking Out for 

Investors?’’ These hearings addressed the market timing and late 

trading scandals first revealed in September 2003 and mutual fund 

corporate governance and internal compliance procedures. Appearing before the Subcommittee were former Securities and Exchange 

Commission Chairman Arthur Levitt, Federal and State enforcement officials and regulators, and representatives from the mutual 

fund industry, academia, a trade association, and investor advocacy 

groups. 

MARKET STRUCTURE

On October 16, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing 

entitled ‘‘Reviewing U.S. Capital Market Structure: The New York 

Stock Exchange and Related Issues.’’ The purpose of the hearing 

was to examine the corporate governance issues at the New York 

Stock Exchange (NYSE), the regulatory role of exchanges, and the 

potential conflicts of interest created by self-regulation. Witnesses 

testifying before the Subcommittee included NYSE Interim Chairman and Chief Executive Officer John Reed, executives of several 

other exchanges, markets, electronic communications networks, 

59

and representatives from an industry trade association, academia, 

and a think tank. 

On October 30, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing 

entitled ‘‘Reviewing U.S. Capital Market Structure: Promoting 

Competition in a Changing Trading Environment.’’ The hearing focused on regulatory reforms that would enhance competition in the 

securities markets in light of the technological advances of recent 

years. The Subcommittee examined the trade-through rule, brokerdealers’ internalization of order flow, market access fees, 

decimalization, and sub-penny trading. Witnesses testifying included the Chairman of the SEC and representatives from the securities industry, and a trade association. 

On February 20, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a field hearing in New York City entitled ‘‘Market Structure III: The Role of 

the Specialist in the Evolving Modern Marketplace.’’ The hearing 

focused on recent reform efforts at the NYSE and the role of the 

NYSE specialist system in a technologically revolutionized marketplace. Witnesses testifying included the chief executive officer of 

the NYSE, and executives representing electronic communications 

networks, an exchange, a national market, a floor broker, an investment adviser, and an NYSE-listed public company. 

On May 18, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘The SEC Proposal on Market Structure: How Will Investors 

Fare?’’ The hearing reviewed the SEC’s proposed rule, ‘‘Regulation 

NMS,’’ which contains four interrelated proposals designed to modernize the regulatory structure of the equity markets. Testifying 

before the Subcommittee were the former chief executive officer of 

an electronic communications network, executives of an institutional broker, a specialist firm and a market maker, and representatives from an industry trade association, academia, and two think 

tanks. 

PROTECTING THE CAPITAL MARKETS AGAINST TERRORISM

On February 12, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing 

entitled ‘‘Recovery and Renewal: Protecting the Capital Markets 

against Terrorism Post 9/11.’’ The purpose of the hearing was to 

provide a forum for the General Accounting Office (GAO) to present 

to the Subcommittee the principal findings of its study (requested 

by Mr. Oxley and others) on the preparations undertaken by financial market participants since September 11, 2001, to protect themselves from physical and electronic attacks. Additionally, the Subcommittee heard direct testimony from actual market participants 

regarding these preparations. Aside from the GAO, the Subcommittee heard testimony from the Securities and Exchange Commission about its efforts to reduce the risks of significant disruptions in market operations in the event of another terrorist attack; 

executives from the New York Stock Exchange and the Nasdaq 

Stock Market about their physical and information security and 

business continuity measures; and the principal trade associations 

60

for broker-dealers and bond market participants about these market participants’ business continuity measures. 

RETURNING MONEY TO DEFRAUDED INVESTORS

On February 26, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing 

entitled ‘‘It’s only FAIR: Returning Money to Defrauded Investors.’’

The purpose of the hearing was to provide the Securities and Exchange Commission (SEC) a forum to discuss the principal findings 

and recommendations in the SEC’s report (required pursuant to 

Section 308 of the Sarbanes-Oxley Act of 2002) examining its enforcement actions over the previous five years in order to identify 

how those proceedings may best be utilized to return monies to defrauded investors; the FAIR Fund provision in the Sarbanes-Oxley 

Act; the difficulties the SEC encounters in collecting disgorgement; 

and the SEC’s efforts to improve its collection efforts and return 

more money to investors. The SEC’s Director of Enforcement testified before the Subcommittee. 

RATING AGENCIES

On April 2, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘Rating the Rating Agencies: the State of Transparency and 

Competition.’’ The purpose of the hearing was to examine issues 

surrounding credit rating agencies including the possible need for 

more disclosure of reasons for ratings agencies’ rating decisions; 

the potential conflicts of interest arising when issuers pay for ratings and when rating agencies develop additional fee-based services; the reasons for the existence of only four nationally recognized 

statistical rating organizations; rating agencies’ anticompetitive 

practices; clarification of current recognition criteria for rating 

agencies; institution of timing goals and other procedures with respect to the evaluation of applications for regulatory recognition by 

the SEC; and the need for greater regulatory oversight. Testifying 

before the Subcommittee were the SEC’s Market Regulation Director, executives from various ratings agencies, and representatives 

from a securities industry trade association, an investment management firm, and academia. 

On September 14, 2004, the Subcommittee on Capital Markets, 

Insurance, and Government Sponsored Enterprises held a hearing 

entitled ‘‘The Ratings Game: Improving Transparency and Competition among the Credit Rating Agencies.’’ The purpose of the 

hearing was to continue the Subcommittee’s oversight of credit rating agencies and the same issues examined at the hearing held on 

April 2, 2003. Witnesses testifying included two executives from 

rating agencies which are not nationally recognized statistical rating organizations and representatives from an industry trade association and a think tank.

HEDGE FUNDS

On May 22, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘The Long and Short of Hedge Funds: Effects of Strategies for 

61

Managing Market Risk.’’ The purpose of the hearing was to examine the regulatory issues surrounding hedge funds, including conflicts of interest faced by investment advisers managing both hedge 

funds and mutual funds, valuation of portfolio securities, alleged 

‘‘retailization’’ of hedge funds, prime broker services provided to 

hedge funds, market impact, and fraud, as well as one of the strategies in which many hedge funds engage, short selling. Witnesses 

testifying before the Subcommittee included the Chairman of the 

Securities and Exchange Commission, executives from hedge fund 

advisers, and representatives from a legal foundation, an investigative association, and academia. 

ACCOUNTING FOR EMPLOYEE STOCK OPTIONS

On June 3, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘The Accounting Treatment of Employee Stock Options.’’ The 

purpose of the hearing was to examine whether employee stock options should be recognized as an expense in a company’s financial 

statements. Mr. Dreier and Ms. Eshoo testified on the merits of 

H.R. 1372, the Broad-Based Stock Option Plan Transparency Act, 

their legislation directing the SEC to increase the transparency of 

employee stock option plans by requiring enhanced disclosures in 

public company financial statements and to perform a three-year 

evaluation of the effectiveness of the new disclosures. The legislation also prohibited the SEC from recognizing as authoritative any 

standard of the Financial Accounting Standards Board (FASB) related to the treatment of stock options from the date of the bill’s 

enactment through the submission of the SEC’s report. Witnesses 

testifying before the Subcommittee included International Accounting Standards Committee Foundation Trustees’ Chairman and 

former Federal Reserve Chairman Paul Volcker, FASB Chairman 

Robert Herz, former SEC Chairman Roderick M. Hills, and representatives from the high-tech industry and a think tank. 

On April 21 and May 4, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held two 

days of hearings entitled ‘‘The FASB Stock Options Proposal: Its 

Effect on the U.S. Economy and Jobs.’’ The hearing focused on the 

economic impact of FASB’s rulemaking proposal to require all employee stock options to be recognized as an expense in a company’s 

financial statements. Witnesses testifying before the Subcommittee 

were representatives from the FASB, the Director of the Congressional Budget Office, and representatives from the high-tech industry, a venture capital firm, a think tank, and academia. 

529 COLLEGE SAVINGS PLANS

On June 2, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘Investing for the Future: 529 State Tuition Savings Plans.’’

The purpose of the hearing was to scrutinize 529 college tuition 

savings plans, created in 1996 under the Federal tax code to encourage saving for college education and deemed municipal securities, thus falling under the jurisdiction of State regulators. The 

hearing focused on the regulatory oversight of these plans, the disparate and often confusing disclosure of plan fees and performance, 

62

and the recent and enormous growth in assets of these investment 

vehicles. Witnesses testifying before the Subcommittee were representatives from the College Savings Plans Network, Ohio’s 529 

college tuition savings plan regulator, a mutual fund ratings firm, 

a securities industry trade association, an investor advocacy group, 

and academia. 

SARBANES-OXLEY ACT

During the 108th Congress the full Committee and the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a series of oversight hearings on the implementation of the provisions of the Sarbanes-Oxley Act of 2002 

passed in the wake of the largest corporate scandals since the enactment of the securities laws in the 1930s. Sarbanes-Oxley is 

widely considered the most comprehensive corporate reform law in 

U.S. history. 

On February 4, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing 

entitled ‘‘The Role of Attorneys in Corporate Governance.’’ The purpose of the hearing was to focus on the new standards of professional conduct for corporate attorneys. Sarbanes-Oxley included a 

provision requiring the SEC to issue rules establishing minimum 

standards of professional conduct for attorneys appearing and practicing before the agency. Witnesses provided testimony of their 

views on the SEC’s adopted and proposed rules on the responsibility of attorneys to report fraudulent behavior and the breadth of 

attorney reporting requirements. Testifying before the Subcommittee were lawyers from a national law firm and a trade association and three representatives from legal academia. 

On June 24, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held an oversight 

hearing on the Public Company Accounting Oversight Board 

(PCAOB) entitled ‘‘Overview of the Public Company Accounting 

Oversight Board.’’ The Chairman of the PCAOB testified before the 

Subcommittee on the status of the PCAOB’s registration of public 

accounting firms, the PCAOB’s establishment of auditing, quality 

control and ethics standards, and recently completed inspections by 

the PCAOB of the 4 largest public accounting firms. 

GOVERNMENT SPONSORED ENTERPRISES

On June 25, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘GSE Oversight: The Need for Reform and Modernization.’’ Accounting irregularities at Freddie Mac resulted in a major management reorganization at the GSE. This occurred following an affirmation by the GSE regulator that there were no problems with 

management. Witnesses testifying before the Subcommittee included representatives from a credit rating agency, academia, and 

a government accountability organization. 

On January 21, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing to 

review the Office of Federal Housing Enterprise Oversight’s 

(OFHEO) special examination of Freddie Mac. Following the accounting irregularities and management reorganization at Freddie 

63

Mac, OFHEO conducted a special examination of the GSE and developed regulatory remedies for these actions. Witnesses testifying 

before the Subcommittee included the Director of OFHEO and the 

CFO of Freddie Mac. 

On October 6, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing 

entitled, ‘‘The OFHEO Report: Allegations of Accounting and Management Failure at Fannie Mae,’’ to review the OFHEO special examination of Fannie Mae. After the revelation of accounting irregularities at Freddie Mac, OFHEO began a forensic audit of Fannie 

Mae. The hearing examined an interim report which raised concerns relating to the accounting treatment of derivatives and potential revenue smoothing by Fannie Mae. Witnesses at this hearing 

included the Director of OFHEO, as well as the CEO and the CFO 

of Fannie Mae. 

OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT AND FEDERAL

HOUSING FINANCE BOARD

On July 13, 2004 the Subcommittee on Oversight and Investigations and the Subcommittee on Capital Markets, Insurance, and 

Government Sponsored Enterprises held a joint hearing entitled ‘‘A 

Review of the Office of Federal Housing Enterprise Oversight and 

Federal Housing Finance Board.’’ The Subcommittees examined the 

operations of the Office of Federal Housing Enterprise Oversight 

and the Federal Housing Finance Board. The Director of OFHEO 

and the Chairman of the Federal Housing Finance Board testified 

at this hearing. 

ABUSIVE FINANCIAL PRODUCT SALES TO MILITARY PERSONNEL

On September 9, 2004, the Subcommittee on Capital Markets, 

Insurance, and Government Sponsored Enterprises held a hearing 

entitled ‘‘G.I. Finances: Protecting Those Who Protect Us.’’ The 

hearing focused on the allegedly abusive practices involving sales 

of securities and insurance products to military personnel. Highlighted were the sales of the contractual plan, a product with a 

front-end sales load of 50 percent assessed against the first year of 

contributions that has all but disappeared from the civilian market. 

Attention was also directed to sales of life insurance through coercive means and in violation of Department of Defense regulations. 

Witnesses testifying before the Subcommittee were executives from 

First Command Financial Planning, the dominant retailer of contractual plans, American Amicable Life Insurance Company of 

Texas, whose agents have been accused of sales abuses, a current 

military officer who was an alleged victim of abusive sales practices, and representatives from an investor advocacy group and various industry trade associations. 

SECONDARY MARKET INVOLVEMENT IN REAL ESTATE DEVELOPMENT IN

THE POCONOS

On June 14, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a field hearing 

in East Stroudsburg, Pennsylvania, entitled ‘‘Broken Dreams in the 

Poconos: The Response of the Secondary Markets and Implications 

64

for Federal Legislation.’’ The purpose of the hearing was to investigate the allegedly widespread ‘‘predatory lending’’ within the 

Monroe County, Pennsylvania, homebuilding and real estate communities. Predatory lending typically involves the practice of targeting individuals, often minorities or the elderly, with high-interest mortgages or loans with little or no consideration of their ability to repay. Predatory lending may also encompass the placement 

of individuals in over-valued homes using deceptive sales practices 

or faulty appraisals. Because such lending deliberately stretches 

borrowers beyond the amount they can pay or deceptively places 

them into an overvalued home, it regularly results in default or 

foreclosure proceedings, which has been common in Monroe County. Providing testimony before the Subcommittee were a Monroe 

County homeowner, a realtor, and representatives from Fannie 

Mae, Freddie Mac, a homeowners association, a builders association, and appraisal organizations. 

INSURANCE REGULATION

On April 10, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘The Effectiveness of State Regulation: Why Some Consumers 

Can’t Get Insurance.’’ The purpose of the hearing was to focus on 

the lack of availability of personal insurance for consumers in several States and the lack of capital for the insurance industry as a 

whole. Witnesses testifying before the Subcommittee included the 

Director of the South Carolina Department of Insurance, representatives from several trade associations, and an economist. 

On November 5, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing 

entitled ‘‘Reforming Insurance Regulation-Making the Marketplace 

More Competitive for Consumers.’’ The hearing focused on the status of National Association of Insurance Commissioners (NAIC) initiatives to modernize State insurance regulation and the prospects 

for State based reform. The hearing also reviewed other proposed 

solutions to increase the efficiency and uniformity of insurance regulation. Witnesses testifying before the Subcommittee included the 

Arkansas Commissioner of Insurance, the New York Superintendent of Insurance, representatives from State legislatures, 

and executives from several trade associations and industry groups. 

On March 31, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing 

entitled ‘‘Working with State Regulators to Increase Insurance 

Choices for Consumers.’’ The purpose of the hearing was to examine how to make State insurance regulation more efficient, uniform, and effective for consumers. Witnesses testifying before the 

Subcommittee included the Director of the South Carolina Department of Insurance and President of the National Association of Insurance Commissioners, the New York Superintendent of Insurance, the Washington State Insurance Commissioner, representatives from various trade associations, and marketplace participants 

and analysts. 

65

TERRORISM RISK INSURANCE

On April 2, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises and the Subcommittee on Oversight and Investigations held a joint hearing entitled ‘‘A Review of TRIA and its Effect on the Economy: Helping 

America Move Forward.’’ The purpose of the hearing was to conduct a review of the progress made by the Treasury Department 

and the insurance industry in implementing the provisions of the 

Terrorism Risk Insurance Act of 2002 (TRIA), as well as changes 

in the market for terrorism insurance coverage under TRIA. The 

Subcommittee heard testimony from the Assistant Secretary of the 

Treasury for Financial institutions, the New York Superintendent 

of Insurance, and the Government Accountability Office. 

HEARINGS HELD

Recovery and Renewal: Protecting the Capital Markets Against 

Terrorism Post 9/11. Hearing entitled ‘‘Recovery and Renewal: Protecting the Capital Markets Against Terrorism Post 9/11.’’ February 12, 2003. PRINTED, serial no. 108–2. 

It’s Only FAIR: Returning Money to Defrauded Investors. Hearing 

entitled ‘‘It’s Only FAIR: Returning Money to Defrauded Investors.’’ February 26, 2003. PRINTED, serial no. 108–4. 

H.R. 658, the Accountant, Compliance, and Enforcement Staffing 

Act of 2003 and H.R. 957, the Broker Accountability through Enhanced Transparency Act of 2003. Hearing on H.R. 658, the Accountant, Compliance, and Enforcement Staffing Act of 2003 and 

H.R. 957, the Broker Accountability through Enhanced Transparency Act of 2003. March 6, 2003. PRINTED, serial no. 108–9. 

Mutual Fund Industry Practices and Their Effect on Individual 

Investors. Hearing entitled ‘‘Mutual Fund Industry Practices and 

Their Effect on Individual Investors.’’ March 12, 2003. PRINTED, 

serial no. 108–11. 

Rating the Rating Agencies: the State of Transparency and Competition. Hearing entitled ‘‘Rating the Rating Agencies: the State of 

Transparency and Competition.’’ April 2, 2003. PRINTED, serial 

no. 108–18. 

The Effectiveness of State Regulation: Why Some Consumers 

Can’t Get Insurance. Hearing entitled ‘‘The Effectiveness of State 

Regulation: Why Some Consumers Can’t Get Insurance.’’ April 10, 

2003. PRINTED, serial no. 108–22. 

Retirement Security: What Seniors Need to Know About Protecting Their Futures. Hearing entitled ‘‘Retirement Security: What 

Seniors Need to Know About Protecting Their Futures.’’ May 15, 

2003. PRINTED, serial no. 108–29. 

The Long and Short of Hedge Funds: Effects of Strategies for 

Managing Market Risk. Hearing entitled ‘‘The Long and Short of 

Hedge Funds: Effects of Strategies for Managing Market Risk.’’

May 22, 2003. PRINTED, serial no. 108–30.

The Accounting Treatment of Employee Stock Options. Hearing 

entitled ‘‘The Accounting Treatment of Employee Stock Options.’’

June 3, 2003. PRINTED, serial no. 108–32. 

H.R. 2179, the Securities Fraud Deterrence and Investor Restitution Act of 2003. Hearing on H.R. 2179, the Securities Fraud DeterVerDate jul 14 2003 02:56 Jan 11, 2005 Jkt 039006 PO 00000 Frm 00071 Fmt 6601 Sfmt 6602 E:\HR\OC\HR802.XXX HR802
66

rence and Investor Restitution Act of 2003. June 5, 2003. PRINTED, serial no. 108–34. 

H.R. 2420, the Mutual Funds Integrity and Fee Transparency Act 

of 2003. Hearing on H.R. 2420, the Mutual Funds Integrity and 

Fee Transparency Act of 2003. June 18, 2003. PRINTED, serial no. 

108–39. 

GSE Oversight: The Need for Reform and Modernization. Hearing entitled ‘‘GSE Oversight: The Need for Reform and Modernization.’’ June 25, 2003. PRINTED, serial no. 108–43. 

Reviewing U.S. Capital Market Structure: The New York Stock 

Exchange and Related Issues. Hearing entitled ‘‘Reviewing U.S. 

Capital Market Structure: The New York Stock Exchange and Related Issues.’’ October 16, 2003. PRINTED, serial no. 108–57. 

Reviewing U.S. Capital Market Structure: Promoting Competition 

in a Changing Trading Environment. Hearing entitled ‘‘Reviewing 

U.S. Capital Market Structure: Promoting Competition in a Changing Trading Environment.’’ October 30, 2003. PRINTED, serial no. 

108–60. 

Mutual Funds: Who’s Looking Out for Investors? Hearing entitled ‘‘Mutual Funds: Who’s Looking Out for Investors?’’ November 4 and 

6, 2003. PRINTED, serial no. 108–61. 

Reforming Insurance Regulation—Making the Marketplace More 

Competitive for Consumers. Hearing entitled ‘‘Reforming Insurance 

Regulation—Making the Marketplace More Competitive for Consumers.’’ November 5, 2003. PRINTED, serial no. 108–63. 

The Special Examination of Freddie Mac. Hearing on the Special 

Examination of Freddie Mac. January 21, 2004. PRINTED, serial 

no. 108–64. 

The Role of Attorneys in Corporate Governance. Hearing entitled ‘‘The Role of Attorneys in Corporate Governance.’’ February 4, 

2004. PRINTED, serial no. 108–66. 

Market Structure III: The Role of the Specialist in the Evolving 

Modern Marketplace. Field hearing entitled ‘‘Market Structure III: 

The Role of the Specialist in the Evolving Modern Marketplace.’’

February 20, 2004. PRINTED, serial no. 108–68. 

H.R. 3574, the Stock Option Accounting Reform Act. Hearing on 

H.R. 3574, the Stock Option Accounting Reform Act. March 3, 

2004. PRINTED, serial no. 108–69. 

Working with State Regulators to Increase Insurance Choices for 

Consumers. Hearing entitled ‘‘Working with State Regulators to Increase Insurance Choices for Consumers.’’ March 31, 2004. PRINTED, serial no. 108–77. 

The FASB Stock Options Proposal: Its Effect on the U.S. Economy 

and Jobs. Hearing entitled ‘‘The FASB Stock Options Proposal: Its 

Effect on the U.S. Economy and Jobs.’’ April 21 and May 4, 2004. 

PRINTED, serial no. 108–80. 

A Review of TRIA and Its Effect on the Economy: Helping America Move Forward. Joint hearing with the Subcommittee on Oversight and Investigations entitled ‘‘A Review of TRIA and Its Effect 

on the Economy: Helping America Move Forward.’’ April 28, 2004. 

PRINTED, serial no. 108–81. 

The SEC Proposal on Market Structure: How Will Investors Fare?

Hearing entitled ‘‘The SEC Proposal on Market Structure: How 

Will Investors Fare?’’ May 18, 2004. PRINTED, serial no. 108–88. 

67

Investing for the Future: 529 State Tuition Savings Plans. Hearing entitled ‘‘Investing for the Future: 529 State Tuition Savings 

Plans.’’ June 2, 2004. PRINTED, serial no. 108–90. 

Broken Dreams in the Poconos: The Response of the Secondary 

Markets and Implications for Federal Legislation. Field hearing entitled ‘‘Broken Dreams in the Poconos: The Response of the Secondary Markets and Implications for Federal Legislation.’’ June 14, 

2004. PRINTED, serial no. 108–92. 

Overview of the Public Company Accounting Oversight Board.

Hearing entitled ‘‘Overview of the Public Company Accounting 

Oversight Board.’’ June 24, 2004. Serial no. 108–98. 

A Review of the Office of Federal Housing Enterprise Oversight 

and Federal Housing Finance Board. Joint hearing with the 

Subcommitee on Oversight and Investigations entitled ‘‘A Review of 

the Office of Federal Housing Enterprise Oversight and Federal 

Housing Finance Board.’’ July 13, 2004. Serial no. 108–100. 

G.I. Finances: Protecting Those Who Protect Us. Hearing entitled ‘‘G.I. Finances: Protecting Those Who Protect Us.’’ September 9, 

2004. Serial no. 108–109. 

The Ratings Game: Improving Transparency and Competition 

among the Credit Rating Agencies. Hearing entitled ‘‘The Ratings 

Game: Improving Transparency and Competition among the Credit 

Rating Agencies.’’ September 14, 2004. Serial no. 108–110. 

The OFHEO Report: Allegations of Accounting and Management 

Failure at Fannie Mae. Hearing entitled ‘‘The OFHEO Report: Allegations of Accounting and Management Failure at Fannie Mae.’’ October 6, 2004. Serial no. 108–115.

(69)

SUBCOMMITTEE ON DOMESTIC AND INTERNATIONAL MONETARY

POLICY, TRADE, AND TECHNOLOGY

(Ratio: 14–12)

PETER T. KING, New York, Chairman

JUDY BIGGERT, Illinois 

Vice Chair

JAMES A. LEACH, Iowa 

MICHAEL N. CASTLE, Delaware 

RON PAUL, Texas 

DONALD A. MANZULLO, Illinois 

DOUG OSE, California 

JOHN B. SHADEGG, Arizona 

MARK R. KENNEDY, Minnesota 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

TIM MURPHY, Pennsylvania 

J. GRESHAM BARRETT, South Carolina 

KATHERINE HARRIS, Florida 

MICHAEL G. OXLEY, Ohio 

ex officio

CAROLYN B. MALONEY, New York 

BERNARD SANDERS, Vermont*

MELVIN L. WATT, North Carolina 

MAXINE WATERS, California 

BARBARA LEE, California 

PAUL E. KANJORSKI, Pennsylvania 

BRAD SHERMAN, California 

DARLENE HOOLEY, Oregon 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 3

RAHM EMANUEL, Illinois 

CHRIS BELL, Texas 1

BARNEY FRANK, Massachusetts 

ex officio

*Mr. Sanders is an independent, but caucuses with the Democratic Caucus.

LEGISLATIVE ACTIVITIES

INTERNATIONAL FINANCIAL INSTITUTIONS REPLENISHMENT

Public Law 108–199 (H.R. 2673; H.R. 2800; H.R. 2243) 

To provide for the participation of the United States in the thirteenth replenishment of the resources of the International Development Association (IDA), the seventh replenishment of the resources 

of the Asian Development Fund (AsDF), and the ninth replenishment of the resources of the African Development Fund (AfDF), 

and for other purposes. 

Summary 

H.R. 2243 authorizes the participation of the United States in 

the thirteenth replenishment of the IDA, the seventh replenishment of the AsDF and the ninth replenishment of the AfDF. These 

replenishments will be in such amounts as are appropriated by the 

Congress. Additionally, H.R. 2243 calls for efforts by the Secretary 

of the Treasury to seek to achieve significant policy goals within 

these development institutions related to transparency, preventing 

fraud, and promoting good governance. 

Legislative History 

H.R. 2243 was introduced by Mr. King and one original cosponsor on May 22, 2003, and referred to the Committee on Financial 

Services. On June 15, 2003, it was referred to the Subcommittee 

on Domestic and International Monetary Policy, Trade, and Technology. On June 16, 2003, the Subcommittee on Domestic and 

70

International Monetary Policy, Trade, and Technology met in open 

session to consider H.R. 2243 and approved the measure for full 

Committee consideration by a voice vote. 

On July 23, 2003, the House considered H.R. 2800, the Foreign 

Operations, Export Financing, and Related Programs Appropriations Act, 2004. An amendment to H.R. 2800 containing the substantive provisions of H.R. 2243 was agreed to by a voice vote. On 

July 24, 2003, the House approved H.R. 2800, as amended, by a 

record vote of 370 yeas and 50 nays. 

The text of H.R. 2800 was included in H.R. 2673, the FY 2004 

Consolidated Appropriations bill, which was signed into law on 

January 23, 2004, becoming Public Law 108–199. 

DEFENSE PRODUCTION ACT REAUTHORIZATION OF 2003

Public Law 108–195 (H.R. 1280; S. 1680) 

To reauthorize the Defense Production Act of 1950, and for other 

purposes. 

Summary 

H.R. 1280 authorized the extension of the Defense Production 

Act of 1950 (DPA) for five years, expiring at the end of fiscal year 

2008. Additionally, the bill made certain technical amendments 

and lifted the $50 million per-project cap on projects that expand 

the domestic defense industrial base to $200 million for a project 

involving radiation-hardened electronics. 

The bill also includes provisions explicitly extending DPA authority for projects to protect the Nation’s critical infrastructure, and 

a provision addressing defense offsets. 

Legislative History 

H.R. 1280 was introduced by Mr. King on March 13, 2003, with 

two original cosponsors, and referred to the Committee on Financial Services. On March 19, 2003, the bill was referred to the Subcommittee on Domestic and International Monetary Policy, Trade, 

and Technology.

On March 20, 2003, the Subcommittee held a hearing on the bill. 

Following the hearing, the Subcommittee met in open session on 

March 20, 2003, and approved H.R. 1280, as amended, by a voice 

vote. 

On March 26, 2003, the full Committee met in open session, and 

ordered the bill favorably reported to the House, with an amendment, by a voice vote. On April 2, 2003, H.R. 1280 was reported 

to the House by the Committee on Financial Services (H. Rept. 

108–56). 

S. 1680 was introduced by Senator Shelby on September 30, 

2003, and referred to the Senate Committee on Banking, Housing, 

and Urban Affairs. On that date, this Committee reported an original measure to the Senate with a written report (S. Rept. 108–156), 

and it was placed on the Senate Legislative Calendar. The bill was 

laid before the Senate and passed with an amendment by unanimous consent. 

On October 1, 2003, S. 1680 was received in the House and referred to the House Financial Services Committee. 

71

On October 15, 2003, S. 1680 was considered under suspension 

of the Rules and passed the House with an amendment by a voice 

vote. 

The Senate concurred in the House amendment with an amendment by unanimous consent on November 21, 2003. 

On December 8, 2003, the House agreed to the Senate amendment to the House amendment by unanimous consent, clearing the 

bill for the White House. This bill was presented to the President 

on December 11, 2004, and signed into law on December 19, 2003, 

becoming Public Law 108–195. 

TONY BLAIR GOLD MEDAL

Public Law 108–60 (H.R. 1511; S. 709) 

To award a congressional gold medal to Prime Minister Tony 

Blair. 

Summary 

The bill directs the Speaker of the House of Representatives and 

the President Pro Tempore of the Senate to arrange for the presentation, on behalf of Congress, of a Congressional gold medal to 

Prime Minister Tony Blair of the United Kingdom in recognition of 

his outstanding and enduring contributions to maintaining the security of all freedom-loving nations. The legislation also requires 

the Secretary of the Treasury to strike the medal and allows for 

the striking and sale of duplicate bronze medals. 

Legislative History 

H.R. 1511 was introduced by Mrs. Brown-Waite on March 31, 

2003, with ten original co-sponsors, and referred to the House Committee on Financial Services. 

On June 25, 2003, the House considered the measure under suspension of the rules, and passed the bill by a voice vote. On June 

26, 2003, H.R. 1511 was received in the Senate, read twice, and referred to the Committee on Banking, Housing, and Urban Affairs. 

S. 709 was introduced in the Senate on March 26, 2003, by Senator Dole and 18 original cosponsors. It was read twice and referred to the Senate Committee on Banking, Housing, and Urban 

Affairs. 

On May 7, 2003, S. 709 was reported to the Senate by the Senate 

Committee on Banking, Housing, and Urban Affairs without 

amendment or a written report. On May 15, 2003, S. 709 was 

passed by the Senate without amendment by unanimous consent. 

On May 15, 2003, S. 709 was received in the House and referred 

to the House Committee on Financial Services. On May 23, 2003, 

it was referred to the Subcommittee on Domestic and International 

Monetary Policy, Trade, and Technology. 

On July 14, 2003, the Committee on Financial Services was discharged from the further consideration of S. 709, and the House 

passed the bill by unanimous consent. 

On July 16, 2003, the bill was presented to the President and 

signed into law on July 17, 2003, becoming Public Law 108–60. 

72

GOLD MEDAL TO DOROTHY HEIGHT

Public Law 108–162 (H.R. 1821; S. 1266) 

To award a congressional gold medal to Dr. Dorothy Height in 

recognition of her many contributions to the Nation. 

Summary 

H.R. 1821 authorizes the Speaker of the House of Representatives and the President Pro Tempore of the Senate to arrange for 

the presentation to Dr. Dorothy Height, president of the National 

Council of Negro Women, of a Congressional gold medal in recognition of her many contributions to the Nation, including her work 

on civil rights, AIDS education, and women’s rights. The Secretary 

of the Treasury is to strike the medal and may strike and sell 

bronze duplicates. 

Legislative History 

H.R. 1821 was introduced by Ms. Watson and it was referred to 

the House Committee on Financial Services on April 11, 2003. On 

April 29, 2003, H.R. 1821 was referred to the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology. 

On October 15, 2003, the bill was considered under suspension 

of the rules and passed the House by a voice vote. 

On October 16, 2003, H.R. 1821 was received in the Senate. On 

October 21, 2003, H.R. 1821 was read twice and referred to the 

Senate Committee on Banking, Housing, and Urban Affairs. 

On November 21, 2003, the Senate Committee on Banking, 

Housing, and Urban Affairs was discharged from the further consideration of the bill, and the Senate passed H.R. 1821 without 

amendment by unanimous consent, clearing the bill for the White 

House. 

On November 26, 2003, H.R. 1821 was presented to the President. The President signed H.R. 1821 into law on December 6, 

2003, becoming Public Law 108–162. 

GOLD MEDAL TO JACKIE ROBINSON

Public Law 108–101 (H.R. 1900; S. 300) 

To posthumously award a Congressional gold medal to Jackie 

Robinson in recognition of his many contributions to the Nation, 

and to express the sense of the Congress that there should be a national day in recognition of Jackie Robinson. 

Summary 

H.R. 1900 authorizes the President to present a gold medal, on 

behalf of Congress, to the family of Jackie Robinson in recognition 

of his contributions to the Nation, including his contributions to 

American sports, which earned him a place in Baseball’s Hall of 

Fame. It authorizes the Secretary of the Treasury to strike the 

medal and allows him to strike and sell bronze duplicates. The legislation also calls for designation of a national day recognizing Robinson’s accomplishments. 

73

Legislative History 

H.R. 1900 was introduced by Mr. Neal on April 30, 2003, with 

35 original cosponsors and referred to the House Committee on Financial Services. On May 12, 2003, H.R. 1900 was referred to the 

Subcommittee on Domestic and International Monetary Policy, 

Trade, and Technology. 

On October 7, 2003, the bill was considered under suspension of 

the rules and agreed to by a voice vote. 

On October 14, 2003, the bill was received in the Senate. It was 

passed without amendment by unanimous consent on October 17, 

2003, clearing the bill for the White House. On October 22, 2003, 

H.R. 1900 was presented to the President, who signed it on October 

29, 2003, becoming Public Law 108–101. 

GOLD MEDAL FOR BROWN V. BOARD OF EDUCATION

Public Law 108–180 (H.R. 3287; S. 498) 

To award Congressional gold medals, posthumously, to Reverend 

Joseph A. DeLaine, Harry and Eliza Briggs, and Levi Pearson in 

recognition of their contributions to the Nation as pioneers in the 

effort to desegregate public schools that led directly to the landmark desegregation case of Brown et al. v. the Board of Education 

of Topeka et al. 

Summary 

H.R. 3287 authorizes the President posthumously to award gold 

medals, on behalf of Congress, to honor Rev. Joseph Armstrong De 

Laine, Harry and Eliza Briggs and Levi Pearson for their contributions to the Nation as civil rights activists for school desegregation 

in South Carolina. It directs the Secretary of the Treasury to strike 

the medals and allows the Secretary to strike and sell bronze duplicates. 

Legislative History 

H.R. 3287 was introduced by Mr. Clyburn on October 10, 2003, 

and referred to the House Committee on Financial Services. On October 22, 2003, H.R. 3287 was referred to the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology. 

On November 18, 2003, the bill was considered under suspension 

of the rules and agreed to by a voice vote. 

On November 19, 2003, H.R. 3287 was received in the Senate 

and read twice. On November 25, 2003, it was passed by the Senate without amendment by unanimous consent, clearing the bill for 

the White House. H.R. 3287 was presented to the President on December 3, 2003, and signed into law on December 15, 2003, becoming Public Law 108–180. 

TRUE AMERICAN HEROES ACT OF 2003

(H.R. 1538) 

To posthumously award congressional gold medals to government 

workers and others who responded to the attacks on the World 

Trade Center and the Pentagon and perished and to people aboard 

United Airlines Flight 93 who helped resist the hijackers and 

74

caused the plane to crash, to require the Secretary of the Treasury 

to mint coins in commemoration of the Spirit of America, recognizing the tragic events of September 11, 2001, and for other purposes.

Summary 

H.R. 1538, the True American Heroes Act of 2003, directs the 

Speaker of the House and the President pro tempore of the Senate 

to make arrangements for the posthumous award of Congressional 

gold medals to the emergency responders and others who responded to the attacks on the World Trade Center in New York 

City and at the Pentagon and perished in the tragic events of September 11, 2001, and copies to be placed in appropriate station 

houses and precincts. The bill also provides for the award of a Congressional gold medal to each passenger or crew member on board 

United Airlines Flight 93 who is identified by the Attorney General 

as having helped resist the hijackers and caused the plane to 

crash, and authorizes the Secretary to strike and sell duplicate 

bronze copies of the medals. 

The legislation also requires the Secretary of the Treasury to 

strike and make available for sale gold, silver, and ‘‘clad’’ coins in 

commemoration of the attacks, and to give a specially packaged 

gold coin to the family of each victim of the attacks of September 

11, 2001. 

Legislative History 

H.R. 1538 was introduced by Mr. King with three original cosponsors and referred to the Committee on Financial Services on 

April 1, 2003. On April 11, 2003, H.R. 1538 was referred to the 

Subcommittee on Domestic and International Monetary Policy, 

Trade, and Technology. 

On September 11, 2003, H.R. 1538 was considered pursuant to 

a unanimous consent agreement and passed the House by a voice 

vote. 

On September 11, 2003, H.R. 1538 was received in the Senate, 

read twice, and referred to the Committee on Banking, Housing, 

and Urban Affairs. 

GOLD MEDAL TO PRESIDENT JOSE MARIA AZNAR

(H.R. 2131) 

To award a Congressional gold medal to President Jose Maria 

Aznar of Spain. 

Summary 

H.R. 2131 authorizes the Speaker of the House and the President 

Pro Tempore of the Senate to arrange for the presentation, on behalf of Congress, of a gold medal to President Jose Maria Aznar of 

Spain because he was a steadfast ally of the United States in the 

war against terrorism. 

Legislative History 

H.R. 2131 was introduced by Mr. Gibbons and six original cosponsors on April 15, 2003, and referred to the House Committee 

75

on Financial Services. On June 17, 2003, H.R. 2131 was referred 

to the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology. 

On March 10, 2004, the Subcommittee held a hearing on this legislation. Following the hearing on that day the Subcommittee met 

in open session and approved H.R. 2131 for full Committee consideration by a voice vote. 

On March 17, 2004, the full Committee met in open session and 

considered H.R. 2131. The Committee ordered the bill favorably reported to the House, without amendment. The Committee reported 

the bill to the House on April 20, 2004 (H. Rept. 108–463). No further action was taken on this measure during the 108th Congress. 

JAMESTOWN 400TH ANNIVERSARY COMMEMORATIVE COIN ACT OF 2003

Public Law 108–289 (H.R. 1914; S. 976) 

To provide for the issuance of a coin to commemorate the 400th 

anniversary of the Jamestown settlement. 

Summary 

This bill authorizes the Secretary of the Treasury, in 2007, to 

strike and sell up to 500,000 one-dollar silver coins in commemoration of the 400th anniversary of the founding of the Jamestown settlement. It authorizes $10 surcharges on the sales of each coin with 

proceeds being paid, after satisfaction of audit requirements in section 5134(f) of title 31, United States Code, one-half to the Jamestown-Yorktown Foundation to promote understanding of the legacies of Jamestown and one-half, split evenly between the foundation, the Secretary of the Interior and the Association for the Preservation of Antiquities in Virginia to further Jamestown-related 

projects. 

Legislative History 

H.R. 1914 was introduced May 1, 2003, by Mrs. Davis of Virginia 

for herself and 13 original cosponsors and referred to the House 

Committee on Financial Services. 

On May 12, 2003, the bill was referred to the Subcommittee on 

Domestic and International Monetary Policy, Trade, and Technology. On March 10, 2004, the Subcommittee held a legislative 

hearing on the bill, immediately following which the Subcommittee 

considered the bill in open session and approved H.R. 1914 for full 

Committee consideration by a voice vote. 

On March 17, 2004, the full Committee met in open session to 

consider the legislation, and ordered the bill favorably reported to 

the House without amendment by a voice vote. The Committee reported the bill to the House on April 27, 2004 (H. Rept. 108–472, 

Part I), and the Committee on Ways and Means received a sequential referral for a period ending not later than July 6, 2004. 

On July 6, 2004, the Committee on Ways and Means reported 

the bill to the House with an amendment (H. Rept. 108–472, Part 

II). 

On July 14, 2004, the House considered the bill under suspension 

of the rules and passed H.R. 1914 with an amendment by a voice 

vote. 

76

On July 19, 2004, H.R. 1914 was received by the Senate and 

placed on the legislative calendar. On July 20, 2004, it passed the 

Senate without amendment by unanimous consent, clearing the bill 

for the White House. On July 26, 2004, the bill was presented to 

the President, and it was signed into law on August 6, 2004, becoming Public Law 108–289. 

JOHN MARSHALL COMMEMORATIVE COIN ACT

Public Law 108–290 (H.R. 2768; S. 1531) 

To require the Secretary of the Treasury to mint coins in commemoration of Chief Justice John Marshall. 

Summary 

This bill authorizes the Secretary of the Treasury, in 2005, to 

strike and sell up to 400,000 one-dollar silver coins in commemoration of John Marshall’s service to the United States—not only as 

a Chief Justice, but also as a soldier in the Revolutionary War, as 

a Member of Congress, and as Secretary of State. It authorizes $10 

surcharges on the sales of the coins with proceeds being paid, after 

satisfaction of audit requirements in section 5134(f) of title 31, 

United States Code, to the Supreme Court Historical Society to 

support historical research and educational programs about the Supreme Court and the Constitution of the United States and related 

topics; to support fellowship programs, internships, and docents at 

the Supreme Court; and to collect and preserve antiques, artifacts, 

and other historical items related to the Supreme Court and the 

Constitution of the United States and related topics. 

Legislative History 

H.R. 2768 was introduced July 17, 2003, by Mr. Bachus and 24 

original cosponsors and referred to the Committee on Financial 

Services. On August 4, 2003, the bill was referred to the Subcommittee on Domestic and International Monetary Policy, Trade, 

and Technology. On March 10, 2004, the Subcommittee held a legislative hearing on the bill, immediately following which the Subcommittee considered the bill in open session and approved H.R. 

2768 for full Committee consideration by a voice vote. On March 

17, 2004, the full Committee met in open session to consider the 

legislation, and ordered the bill favorably reported to the House by 

a voice vote. The Committee reported the bill to the House on April 

27, 2004, (H. Rept. 108–473, Part I). The Committee on Ways and 

Means received a sequential referral for a period ending not later 

than July 6, 2004. 

The Committee on Ways and Means reported the bill, with an 

amendment, on July 6, 2004 (H. Rept. 108–473, Part II). 

On July 14, 2004, the House considered the bill under suspension 

of the rules and passed H.R. 2768, with an amendment, by a voice 

vote. 

On July 19, 2004, H.R. 2768 was received by the Senate and 

placed on the legislative calendar. On July 20, 2004, it passed the 

Senate without amendment by unanimous consent, clearing the bill 

for the White House. On July 26, 2004, it was presented to the 

77

President, and signed into law on August 6, 2004, becoming Public 

Law 108–290. 

MARINE CORPS 230TH ANNIVERSARY COMMEMORATIVE COIN ACT

Public Law 108–291 (H.R. 3277, S. 894) 

To require the Secretary of the Treasury to mint coins in commemoration of the 230th Anniversary of the United States Marine 

Corps, and to support construction of the Marine Corps Heritage 

Center. 

Summary 

This bill authorizes the Secretary of the Treasury to strike and 

sell up to 500,000 one-dollar silver coins in commemoration of the 

230th anniversary of the founding of the Marine Corps on November 10, 2005. It authorizes $10 surcharges on the sales of the coins 

with proceeds being paid, after satisfaction of audit requirements 

in section 5134(f) of title 31, United States Code, to the Marine 

Corps Heritage Foundation for the purposes of construction of the 

Marine Corps Heritage Center, as authorized by section 1 of Public 

Law 106–398 (114 Stat. 1654). 

Legislative History

H.R. 3277 was introduced October 8, 2003, by Mr. Murtha for 

himself and seven original cosponsors and referred to the House 

Committee on Financial Services. On October 22, 2003, it was referred to the Subcommittee on Domestic and International Monetary Policy, Trade and Technology. 

On March 10, 2004, the Subcommittee held a legislative hearing 

on the bill, immediately following which the Subcommittee considered the bill in open session and approved H.R. 3277 for full Committee consideration by a voice vote. On March 17, 2004, the full 

Committee met in open session to consider the legislation, and ordered the bill favorably reported to the House by a voice vote. The 

Committee reported the bill to the House on April 27, 2004 (H. 

Rept. 108–474, Part I). The bill was sequentially referred to the 

Committee on Ways and Means for a period ending not later than 

July 6, 2004. The Committee on Ways and Means reported the bill 

to the House on July 6, 2004. 

On July 14, 2004, the House considered the bill under suspension 

of the rules and passed H.R. 3277 by a voice vote. 

On July 19, 2004, H.R. 3277 was received by the Senate and 

placed on the legislative calendar. On July 20, 2004, it passed the 

Senate without amendment by unanimous consent, clearing the bill 

for the White House. On July 26, 2004, it was presented to the 

President, and signed into law on August 6, 2004, becoming Public 

Law 108–291. 

DISTRICT OF COLUMBIA AND UNITED STATES TERRITORIES

CIRCULATING QUARTER DOLLAR PROGRAM ACT

(H.R. 2993) 

To provide for a circulating quarter dollar coin program to honor 

the District of Columbia, the Commonwealth of Puerto Rico, Guam, 

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American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands, and for other purposes. 

Summary 

This bill provides for the redesign of the reverse of the circulating quarter-dollar with reverse designs commemorating for equal 

portion of 2009, in order, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the United States 

Virgin Islands, and the Commonwealth of the Northern Mariana 

Islands. Although the program is separate from the 50-State quarter-dollar program that ends the previous year, designs would be 

chosen in a similar fashion: by the Secretary of the Treasury after 

consultation with the chief executive of each jurisdiction. No quarter would be struck for a jurisdiction if it becomes a State or if it 

becomes independent before such striking would commence. 

Legislative History 

H.R. 2993 was introduced September 3, 2003, by Mr. King of 

New York and six original cosponsors, and referred to the Committee on Financial Services. On September 16, 2003, it was referred to the Subcommittee on Domestic and International Policy, 

Trade, and Technology. 

On March 24, 2004, the House considered the bill under suspension of the rules, and the House passed H.R. 2993 by a record vote 

of 411 yeas and 14 nays. The bill was received in the Senate on 

March 29, 2004. 

No further action was taken on this measure in the 108th Congress. 

BUREAU OF ENGRAVING AND PRINTING SECURITY PRINTING ACT OF

2004

(H.R. 3786) 

To authorize the Secretary of the Treasury to produce currency, 

postage stamps, and other security documents at the request of foreign governments on a reimbursable basis. 

Summary 

This bill authorizes the Treasury’s currency-printing arm, the 

Bureau of Engraving and Printing, to print currency and other security documents for other countries on a fully reimbursable basis, 

provided that the Bureau has adequate capacity to do so without 

interfering with the printing of U.S. banknotes, and that the Secretary of State certifies that such work is consistent with U.S. foreign policy. 

Legislative History 

H.R. 3786 was introduced by request on February 10, 2004, by 

Mr. King of New York and one original cosponsor, and referred to 

the Committee on Financial Services. On March 1, 2004, it was referred to the Subcommittee on Domestic and International Monetary Policy, Trade and Technology. 

79

On March 24, 2004, the House considered the bill under suspension of the rules. The House passed H.R. 3786 by a record vote of 

422 yeas and 2 nays. 

The bill was received in the Senate March 29, 2004, read twice 

and referred to the Senate Committee on Banking, Housing, and 

Urban Affairs.

Language similar to H.R. 3786 was included in H.R. 10, the

9/11 Recommendations Implementation Act. For further action on 

this measure, see H.R. 10. 

PRESIDENTIAL $1 COIN ACT OF 2004

(H.R. 3916) 

To improve circulation of the $1 coin, create a new bullion coin, 

and for other purposes. 

Summary 

H.R. 3916, the Presidential $1 Coin Act of 2004, improves the circulation of the one-dollar coin by establishing a regularly changing 

design for the coin similar to the 50-state quarter-dollar program. 

The obverse of the coin would change every three months, beginning in 2006, to represent, in order, the Presidents of the United 

States, and the reverse would represent the Statue of Liberty. Concurrently with that program a new investor-grade pure-gold bullion 

coin would be issued on the same schedule, with images representing the First Spouses of the President whose circulating coin 

was being struck at that point. Several design changes are specified for the circulating coin to make the dollar coins more attractive 

to consumers and collectors, and a Sense of Congress section suggests ways to remove bottlenecks to the orderly circulation of onedollar coins throughout the country. 

Legislative History 

H.R. 3916 was introduced March 9, 2004, by Mr. Castle and one 

original cosponsor, and referred to the Committee on Financial 

Services. On March 29, 2004, it was referred to the Subcommittee 

on Domestic and International Monetary Policy, Trade, and Technology. 

On April 28, 2004, the Subcommittee held a legislative hearing 

on the bill and immediately thereafter met to consider H.R. 3916 

in open session, approving the bill for full Committee consideration, 

as amended, by a voice vote. 

On June 3, 2004, the full Committee met in open session to consider H.R. 3916. The bill was ordered favorably reported to the 

House, with an amendment, by a voice vote. The Committee reported the bill to the House, with an amendment, on June 24, 2004 

(H. Rept. 108–568). 

No further action was taken on this measure in the 108th Congress. 

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GOLD MEDAL FOR REV. DR. MARTIN LUTHER KING, JR. AND HIS WIDOW

CORETTA SCOTT KING

PUBLIC LAW 108–368 (S. 1368, H.R. 2680) 

To authorize the President to award a gold medal on behalf of 

the Congress to Reverend Doctor Martin Luther King, Jr. (posthumously) and his widow Coretta Scott King in recognition of their 

contributions to the Nation on behalf of the civil rights movement. 

Summary 

This bill authorizes the President to present, on behalf of Congress, a gold medal of appropriate design to the Rev. Dr. Martin 

Luther King, Jr. (posthumously) and his widow, Coretta Scott 

King, as the ‘‘first family of the civil rights movement,’’ both with ‘‘distinguished records of public service to the American people and 

the international community.’’

Legislative History 

H.R. 2680 was introduced by Mr. Lewis of Georgia July 9, 2003, 

and 79 original cosponsors, and referred to the Committee on Financial Services. On July 14, 2003, it was referred to the Subcommittee on Domestic and International Monetary Policy, Trade, 

and Technology. 

S. 1368 was introduced June 27, 2003, by Senator Levin and 18 

original cosponsors and referred to the Senate Committee on Banking, Housing, and Urban Affairs. On September 9, 2004, the Committee was discharged from the further consideration of the bill, 

and it was passed by the Senate without amendment by unanimous consent. 

It was received in the House September 13, 2004, and referred 

to the Committee on Financial Services. On October 7, 2004, it was 

referred to the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology. 

On October 8, 2004, the Committee on Financial Services was 

discharged from the further consideration of S. 1368, and passed by 

the House by unanimous consent, clearing the bill for the White 

House. On October 13, 2004, S. 1368 was presented to the President, and signed into law on October 25, 2004, becoming Public 

Law 108–368. 

BENJAMIN FRANKLIN COMMEMORATIVE COIN ACT

PUBLIC LAW 108–464 (H.R. 3204, S. 2568) 

To require the Secretary of the Treasury to mint coins in commemoration of the tercentenary of the birth of Benjamin Franklin, 

and for other purposes. 

Summary 

This bill authorizes the Secretary of the Treasury, in 2006, to 

strike and sell up to 250,000 each of two designs of one-dollar silver coins in commemoration of the 300th anniversary of the birth 

of Benjamin Franklin. It authorizes a $10 surcharge on the sale of 

each coin with proceeds being paid, after satisfaction of audit requirements in section 5134(f) of title 31, United States Code, to the 

81

Franklin Institute for purposes of the Benjamin Franklin Tercentenary Commission. 

Legislative History 

H.R. 3204 was introduced September 30, 2003, by Mr. Castle and 

one original cosponsor and referred to the Committee on Financial 

Services. On October 3, 2003, it was referred to the Subcommittee 

on Domestic and International Monetary Policy, Trade, and Technology. 

On October 8, 2004, the Committee on Ways and Means waived 

consideration of the measure through an exchange of letters. On 

November 17, 2004, the Committee on Financial Services was discharged from the further consideration of the bill, and the House 

passed the bill with an amendment by unanimous consent. On November 18, 2004, the Clerk was authorized to make a technical correction in the engrossment of the bill by unanimous consent. 

On November 19, 2004, the bill was received in the Senate. On 

December 7, 2004, the Senate passed the bill, clearing the measure 

for the White House. 

The bill was presented to the President on December 10, 2004, 

and signed into law on December 21, 2004, becoming Public Law 

108–464. 

AMERICAN BALD EAGLE RECOVERY AND NATIONAL EMBLEM

COMMEMORATIVE COIN ACT

Public Law 108–486 (H.R. 4116) 

To require the Secretary of the Treasury to mint coins celebrating the recovery and restoration of the American bald eagle, 

the national symbol of the United States, to America’s lands, waterways, and skies and the great importance of the designation of 

the American bald eagle as an ‘‘endangered’’ species under the Endangered Species Act of 1973, and for other purposes. 

Summary 

This bill authorizes the Secretary of the Treasury in 2005 to 

strike and sell up to 100,000 5-dollar gold coins and 500,000 onedollar silver coins in celebration of the recovery of the bald eagle, 

and in commemoration of the 35th anniversary of the enactment of 

the Endangered Species Act of 1973 and the placement of the bald 

eagle on the endangered species list, January 1, 2008. It authorizes 

a $35 surcharge on the gold coins and a $10 surcharge on the sales 

of the silver coins with proceeds being paid, after satisfaction of 

audit requirements in section 5134(f) of title 31, United States 

Code, to the American Eagle Foundation of Tennessee to further its 

works. 

Legislative History 

H.R. 4116, the American Bald Eagle Recovery and National Emblem Commemorative Coin Act, was introduced by Mr. Jenkins on 

April 1, 2004, and referred to the Committee on Financial Services. 

On April 20, 2004, the bill was referred to the Subcommittee on 

Domestic and International Monetary Policy, Trade, and Technology. 

82

On December 7, 2004, the Committee on Financial Services was 

discharged from the further consideration of the bill and the House 

passed H.R. 4116 by unanimous consent. 

On December 8, 2004, the bill was received in the Senate, read 

twice, and passed by the Senate without amendment by unanimous 

consent, clearing the bill for the White House. 

The bill was presented to the President on December 16, 2004, 

and signed into law on December 23, 2004, becoming Public Law 

108–486. 

OVERSIGHT ACTIVITIES

NEW BASEL ACCORD

On February 27, 2003, the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology held an oversight 

hearing entitled, ‘‘The New Basel Accord—Sound Regulation or 

Crushing Complexity?’’ The new Basel Accord (Basel II) has been 

in negotiations for several years and new capital standards applicable to the largest internationally active banks are set to emerge. 

The Subcommittee examined the impact Basel II will have on domestic financial institutions as well as international competition. 

The Subcommittee heard testimony from Federal regulators and 

representatives from financial institutions that will be affected by 

the proposed Accord as well as from academia. 

OPENING TRADE IN FINANCIAL SERVICES

On April 1, 2003, the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology held a hearing 

entitled ‘‘Opening Trade in Financial Services—the Chile and 

Singapore Examples.’’ The hearing focused on the financial services 

related aspects of the recently announced free trade agreements 

(FTAs) with Chile and Singapore. The Subcommittee heard testimony from the Under Secretary of Treasury for International Affairs, the Assistant U.S. Trade Representative for Services, Intellectual Property, and Investment, and representatives from academia and the financial services sector. 

The purpose of this hearing was to give Members an opportunity 

to consider the Chile and Singapore free trade agreements as they 

relate to financial services. The Chile and Singapore agreements 

contain chapters on financial services (banking, securities, insurance, and asset management), investment, transparency and other 

areas. The financial services chapters include obligations on national treatment, most-favored-nation treatment and market access 

(non-discriminatory measures), among other core obligations. 

MATCHING CAPITAL AND ACCOUNTABILITY

On Wednesday, June 11, 2003, the Subcommittee on Domestic 

and International Monetary Policy, Trade, and Technology held a 

hearing entitled ‘‘Matching Capital and Accountability—the Millennium Challenge Account.’’ The Subcommittee heard testimony from 

the Under Secretary of the Treasury for International Affairs, the 

Under Secretary of State for Economic, Business and Agricultural 

Affairs, and the Administrator of the Agency for International Development. 

83

The Millennium Challenge Account (MCA) is a new developmental aid structure based on transparency and accountability. 

These two factors are often criticized as lacking in U.S. participation with multilateral development institutions. Since the majority 

of selection criteria and performance indicators used within the 

MCA rely on international financial institution and multilateral development bank data, Members were specifically interested in the 

process of indicator selection. 

CHINA’S EXCHANGE RATE REGIME

On Wednesday, October 1, 2003, the Subcommittee on Domestic 

and International Monetary Policy, Trade, and Technology held a 

hearing entitled ‘‘China’s Exchange Rate Regime and Its Effects on 

the U.S. Economy.’’ The Subcommittee heard testimony from Members of Congress, the Under Secretary of the Treasury for International Affairs, the Under Secretary of Commerce for International Trade, as well as representatives from academia and trade 

associations. 

This hearing focused on the renminbi exchange rate regime, its 

effect on the U.S. economy, and the role of the U.S. Government 

in promoting change to that exchange rate regime. China has 

grown to become the fourth-largest U.S. trading partner and it recently entered the World Trade Organization (WTO). Increased 

trade liberalization has not been accompanied by capital account 

liberalization, however. The Chinese currency (the ‘‘renminbi,’’

which is denominated in ‘‘yuan’’) is pegged to the U.S. dollar. Since 

1994, the exchange rate has been fixed at 8.3 yuan to one U.S. dollar. This places pressure on the both the Chinese and U.S. economies. 

At the time of the hearing, multiple bills and resolutions had 

been introduced in the House and the Senate seeking to counterbalance the perceived impact of the Chinese exchange rate regime 

on the U.S. manufacturing sector. 

WORLD BANK LENDING TO IRAN

On Wednesday, October 29, 2003, the Subcommittee on Domestic 

and International Monetary Policy, Trade, and Technology held a 

hearing entitled, ‘‘World Bank Lending to Iran.’’ The Subcommittee 

heard testimony from the Deputy Assistant Secretary of the Treasury for International Development, and several academics. 

The Subcommittee hearing explored U.S. policy options regarding 

World Bank lending to Iran. Some believe that World Bank lending 

to Iran provides indirect support for Iran’s nuclear and military 

programs in two ways. First, they contend that providing funding 

to Iran for development purposes frees up resources for military 

purposes because money is fungible. Second, they believe that 

World Bank lending to Iran provides implicit international credibility and access to outside experts. Others take the opposite position. They note that the scale of World Bank lending to Iran is 

minimal in relation to the country’s economy and, therefore, that 

such lending cannot have a real impact on its military programs. 

84

OVERSIGHT OF THE EXPORT-IMPORT BANK OF THE UNITED STATES

On Thursday, May 6, 2004, the Subcommittee on Domestic and 

International Monetary Policy, Trade, and Technology held a hearing entitled ‘‘Oversight of the Export-Import Bank of the United 

States.’’ The President and Chairman of the Export-Import Bank 

was the only witness. 

As the first oversight hearing held since the 2002 reauthorization 

act for the Export-Import Bank (the Bank), the focus of the hearing 

was on how the Bank has implemented the 2002 authorization 

standards. Chairman Merrill also provided testimony regarding the 

Bank’s work to promote reconstruction efforts in Iraq. 

HIPC DEBT RELIEF: WHICH WAY FORWARD?

On Tuesday, April 20, 2004, The Subcommittee on Domestic and 

International Monetary Policy, Trade, and Technology held a hearing entitled ‘‘Highly Indebted Poor Country (HIPC) Debt Relief: 

The Way Forward?’’ The hearing focused on the estimated costs of 

HIPC debt relief, the impact the program has had on people in 

qualifying countries and the challenges the HIPC process faces if 

its program goals are to be achieved. The Subcommittee heard testimony from the General Accounting Office, and two nongovernmental organizations. 

In 1996 and again in 1999, major international creditors, including the World Bank and the IMF, agreed to a debt relief program 

for the world’s poorest, most seriously indebted nations. The U.S. 

has pledged to provide a total of $750 million to the HIPC Trust 

Fund, of which $600 million has already been contributed. At the 

July 2002 Group of Eight summit, the U.S. pledged to contribute 

the remaining $150 million. In FY 2004, Congress appropriated 

$75 million to meet this pledge. 

The General Accounting Office examined the HIPC initiative at 

the Committee’s request. GAO estimates received at the hearing 

indicate that the total cost of the HIPC initiative could be $37.3 billion (net present value). The GAO also provided detailed estimates 

for how much multilateral development banks might need in the 

future to meet HIPC debt relief commitments, and projected what 

percentage the U.S. might be expected to contribute to meet existing debt relief commitments and broader development goals (e.g., 

poverty reduction). 

U.S.-E.U. REGULATORY DIALOGUE: THE PRIVATE SECTOR PERSPECTIVE

On Thursday, June 17, 2004, the Subcommittee on Domestic and 

International Monetary Policy, Trade, and Technology held a hearing entitled, ‘‘The U.S.-EU Regulatory Dialogue: The Private Sector 

Perspective.’’ The Subcommittee heard testimony from representatives of trade associations and academia. The hearing built on the 

May 2004 full Committee hearing on the U.S.-EU Regulatory Dialogue and focused on the benefits and challenges the Dialogue 

holds for the private sector, as well as ways in which the dialogue 

could be improved. 

85

COMBATING INTERNATIONAL TERRORIST FINANCING

The Subcommittees on Domestic and International Monetary Policy, Trade, and Technology and on Oversight and Investigations 

held a joint hearing on Thursday, September 30, 2004, on the status of efforts to combat international terrorist financing. The Assistant Secretary of the Treasury for Terrorist Financing and the 

Assistant Secretary of State for Economic and Business Affairs appeared as witnesses. 

The United States Departments of Treasury and State, in cooperation with other government agencies, have successfully solicited the support of the international community to help combat 

money laundering and terrorist financing. Witnesses highlighted 

the successful promotion of international standards for financial 

transparency and accountability; coordinated technical assistance 

to weak but willing states; ongoing freezing of terrorist-related and 

other criminal assets; continued coordination of intelligence operations; and using diplomacy to convince other governments to take 

significant steps. 

MONEY MATTERS: COIN AND CURRENCY DESIGN AND COUNTERFEITING

ISSUES

On Wednesday, April 28, 2004, the Subcommittee on Domestic 

and International Monetary Policy, Trade, and Technology held a 

hearing on the design of circulating coins and currency, and on 

issues involving the counterfeiting of U.S. bank notes. The hearing 

also served as a legislative hearing for H.R. 3916, the Presidential 

$1 Coin Act of 2004. 

The Subcommittee heard testimony from the Director of the 

United States Mint, the Director of the Bureau of Engraving and 

Printing, the United States Secret Service, the Board of Governors 

of the Federal Reserve System, as well as a number of private sector witnesses. Witnesses discussed design changes being made to 

circulating U.S. banknotes to foil counterfeiters, trends in counterfeiting domestically and abroad, the success of circulating and commemorative coin programs including the 50-State Quarter Program, and efforts to more efficiently circulate U.S. coins and bank 

notes. Witnesses also discussed the need for a widely circulating 

one-dollar coin to keep costs down for business and the reasons 

why recent one-dollar coins have not been successful. 

HEARINGS HELD

The New Basel Accord—Sound Regulation or Crushing Complexity? Hearing entitled ‘‘The New Basel Accord—Sound Regulation or Crushing Complexity.’’ February 27, 2003. PRINTED, serial 

number 108–5. 

The Defense Production Act Reauthorization Act of 2003. Hearing 

on H.R. 1280, the Defense Production Act of 2003. March 19, 2003. 

PRINTED, serial no. 108–13. 

Opening Trade in Financial Services—The Chile and Singapore 

Examples. Hearing entitled ‘‘Opening Trade in Financial Services—

The Chile and Singapore Examples.’’ April 1, 2003. PRINTED, serial no. 108–16. 

86

Matching Capital and Accountability. Hearing entitled ‘‘Matching 

Capital and Accountability.’’ June 11, 2003. PRINTED, serial no. 

108–36. 

China’s Exchange Rate Regime and its Effects on the U.S. Economy. Hearing entitled ‘‘China’s Exchange Rate Regime and its Effects on the U.S. Economy.’’ October 1, 2003. PRINTED, serial no. 

108–56. 

World Bank Lending to Iran. Hearing entitled ‘‘World Bank 

Lending to Iran.’’ October 29, 2003. PRINTED, serial no. 108–59. 

Commemorative Coin Bills. Hearing on H.R. 1914, the Jamestown 400th Anniversary Commemorative Coin Act of 2003, H.R. 

2131, a bill to award a congressional gold medal to President Jose 

Maria Aznar of Spain, H.R. 2768, the John Marshall Commemorative Coin Act, and H.R. 3277, the Marine Corps 230th Anniversary 

Commemorative Coin Act. March 10, 2004. Serial no. 108–71. 

HIPC Debt Relief: Which Way Forward? Hearing entitled ‘‘HIPC 

Debt Relief: Which Way Forward?’’ April 20, 2004. Serial no. 108– 79. 

Money Matters: Coin and Currency Design and Counterfeiting 

Issues. Hearing entitled ‘‘Money Matters: Coin and Currency Design and Counterfeiting Issues. April 28, 2004. Serial no. 108–82. 

Oversight of the Export-Import Bank of the United States. Hearing entitled ‘‘Oversight of the Export-Import Bank.’’ May 6, 2004. 

Serial no. 108–84. 

The U.S.-E.U. Regulatory Dialogue: The Private Sector Perspective. Hearing entitled ‘‘The U.S.-E.U. Regulatory Dialogue: The Private Sector Perspective.’’ June 17, 2004. Serial no. 108–95. 

Combating International Terrorist Financing. Joint hearing with 

the Subcommittee on Oversight and Investigations entitled ‘‘Combating International Terrorist Financing.’’ September 30, 2004. Serial no. 108–114.

(87)

SUBCOMMITTEE ON FINANCIAL INSTITUTIONS AND CONSUMER CREDIT

(Ratio: 25–22)

SPENCER BACHUS, Alabama, Chairman

STEVEN C. LATOURETTE, Ohio 

Vice Chairman

RICHARD H. BAKER, Louisiana 

MICHAEL N. CASTLE, Delaware 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

SUE W. KELLY, New York 

PAUL E. GILLMOR, Ohio 

JIM RYUN, Kansas 

WALTER B. JONES, North Carolina 

JUDY BIGGERT, Illinois 

PATRICK J. TOOMEY, Pennsylvania 

VITO FOSSELLA, New York 

MELISSA A. HART, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

PATRICK J. TIBERI, Ohio 

MARK R. KENNEDY, Minnesota 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

TIM MURPHY, Pennsylvania 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

RICK RENZI, Arizona 

(Vacancy) 

MICHAEL G. OXLEY, Ohio 

ex officio

BERNARD SANDERS, Vermont *

CAROLYN B. MALONEY, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

LUIS V. GUTIERREZ, Illinois 

DENNIS MOORE, Kansas 

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 3

DARLENE HOOLEY, Oregon 

JULIA CARSON, Indiana 

HAROLD E. FORD, JR., Tennessee 

RUBE ́ N HINOJOSA, Texas 

KEN LUCAS, Kentucky 

JOSEPH CROWLEY, New York 

STEVE ISRAEL, New York 

MIKE ROSS, Arkansas 

CAROLYN MCCARTHY, New York 

ARTUR DAVIS, Alabama 

JOE BACA, California 3

CHRIS BELL, Texas 1

BARNEY FRANK, Massachusetts 

ex officio

* Mr. Sanders is an independent, but caucuses with the Democratic Caucus.

LEGISLATIVE ACTIVITIES

FAIR AND ACCURATE CREDIT TRANSACTIONS ACT OF 2003

Public Law 108–159 (H.R. 2622; S. 1753) 

To amend the Fair Credit Reporting Act, to prevent identity 

theft, improve resolution of consumer disputes, improve the accuracy of consumer records, make improvements in the use of, and 

consumer access to, credit information, and for other purposes. 

Summary 

H.R. 2622, the Fair and Accurate Credit Transactions Act of 

2003, provides consumers with tools to fight identity theft and to 

ensure the accuracy of their credit reports while establishing permanent uniform national credit reporting standards. H.R. 2622 empowers consumers to guard against identity theft by increasing the 

effectiveness of consumer initiated fraud alerts and enabling consumers to block fraudulent information in their personal credit 

records after filing a police report. The legislation increases consumer awareness of their rights if they believe they may be victims 

88

of fraud or identity theft by directing the Federal Trade Commission (FTC or Commission) to prepare, and consumer reporting 

agencies to disseminate, a summary of rights of identity theft victims. The legislation enlists financial institutions’ support in fighting identity theft by requiring them to develop procedures to ‘‘red 

flag’’ identity theft, and to investigate certain changes in customer 

addresses. In addition, merchants will be required to truncate credit and debit card information. 

H.R. 2622 also improves the accuracy of consumer records and 

the resolution of consumer disputes. The legislation expands consumer access to credit information to ensure accuracy by giving 

consumers the right to review their credit scores and request a free 

credit report annually. H.R. 2622 provides consumers with important new rights for correcting inaccurate information on their credit reports and discourages the reintroduction of fraudulent information into the credit reporting system. The legislation prohibits furnishers of information from forwarding information on a consumer 

to credit reporting agencies if the furnisher has reasonable cause 

to believe the information is inaccurate. In addition, the bill directs 

regulators to determine how best to ensure the prompt investigation and correction of disputed information in a consumer’s credit 

file. H.R. 2622 also provides significant new protections of consumers’ medical information by limiting the disclosure of certain 

medical information in the preparation and dissemination of credit 

reports, prohibiting the use of medical information in connection 

with any determination of consumers’ eligibility for credit, and requiring credit reporting agencies to code certain sensitive medical 

information to avoid unwanted disclosure. 

Legislative History 

H.R. 2622 was introduced on June 26, 2003, by Mr. Bachus and 

32 original cosponsors and referred to the Committee on Financial 

Services. On July 2, 2003, H.R. 2622 was referred to the Subcommittee on Financial Institutions and Consumer Credit. 

On July 9, 2003, the full Committee held a hearing on H.R. 2622. 

On July 16, 2003, the Subcommittee on Financial Institutions and 

Consumer Credit met in open session and approved H.R. 2622 for 

full Committee consideration, as amended, by a record vote of 41 

yeas and no nays.

On July 24, 2003, the Committee on Financial Services met in 

open session and ordered H.R. 2622 favorably reported to the 

House, with an amendment, by a record vote of 63 yeas and 3 nays. 

On September 4, 2003, the Committee reported H.R. 2622 to the 

House (H. Rept. 108–263). A supplemental report on H.R. 2622 correcting certain Committee votes was filed with the House on September 9, 2003 (H. Rept. 108–263, Part II). 

On September 9, 2003, the Committee on Rules reported a modified open rule for the consideration of H.R. 2622 to the House (H. 

Res. 360). The House agreed to H. Res. 360 on September 10, 2003, 

by a voice vote. On September 10, 2003, the House considered and 

passed H.R. 2622, as amended, by a record vote of 392 yeas and 

30 nays. 

The bill was received in the Senate, read twice, and referred to 

the Senate Committee on Banking, Housing, and Urban Affairs on 

89

September 11, 2003. On November 5, 2003, the Senate Committee 

on Banking, Housing, and Urban Affairs was discharged from the 

further consideration of H.R. 2622 by unanimous consent. The 

measure was laid before the Senate, amended with the text of S. 

1753 as amended, and passed by a record vote of 95 yeas and 2 

nays. The Senate insisted on its amendment, requested a conference with the House, and appointed conferees on November 5, 

2003. 

On November 6, 2003, the House disagreed to the Senate amendment and the Speaker appointed conferees from the Committee on 

Financial Services. A motion to instruct conferees offered by Mr. 

Frank was agreed to by a voice vote. 

The Conferees for the House and Senate met on November 21, 

2003 (the Senate chairing), and agreed to the conference report to 

accompany H.R. 2622. The conference report was filed in the House 

on November 21, 2003 (H. Rept. 108–396). On November 21, 2003, 

the conference report was considered in the House under suspension of the rules, and agreed to by a record vote of 379 yeas and 

49 nays. 

On November 22, 2003, the Senate agreed to the conference report by unanimous consent, clearing the measure for the White 

House. The bill was presented to the President on December 3, 

2003, and signed by the President on December 4, 2003, becoming 

Public Law 108–159. 

CHECK CLEARING FOR THE 21ST CENTURY ACT

Public Law 108–100 (H.R. 1474; S. 1334; H.R. 3183) 

To facilitate check truncation by authorizing substitute checks, to 

foster innovation in the check collection, improve the overall efficiency of the Nation’s payments system, and for other purposes. 

Summary 

H.R. 1474, the Check Clearing for the 21st Century Act, promotes greater efficiency in the overall payments system and reduces the system’s reliance on the Nation’s transportation grid. 

H.R. 1474 modernizes the check clearing process by removing legal 

impediments to electronic check processing. After the September 

11, 2001, terrorist attacks, when the air traffic system was brought 

to a standstill for several days, the check collection process experienced significant disruptions. 

Legislative History 

H.R. 1474 was introduced on March 27, 2003, by Ms. Hart and 

17 original cosponsors, and referred to the Committee on Financial 

Services. On April 8, 2003, the bill was referred to the Subcommittee on Financial Institutions and Consumer Credit. On 

April 8, 2003, the Subcommittee on Financial Institutions and Consumer Credit held a legislative hearing on H.R. 1474. 

On May 14, 2003, the Subcommittee on Financial Institutions 

and Consumer Credit met in open session and approved H.R. 1474, 

as amended, for full Committee consideration by a voice vote. On 

May 21, 2003, the Committee met in open session and ordered H.R. 

1474 reported to the House, with an amendment, by a voice vote. 

90

The Committee on Financial Services reported H.R. 1474 to the 

House on June 2, 2003 (H. Rept. 108–132). 

On June, 3, 2003, the Committee on Rules reported a modified 

open rule providing for consideration of H.R. 1474 (H. Res. 256). 

On June 5, 2003, H. Res. 256 was agreed to by a voice vote. On 

the same date, the House considered and passed, as amended, H.R. 

1474 by a record vote of 405 yeas and no nays. On June 5, 2003, 

H.R. 1474 was received in the Senate, read twice, and referred to 

the Senate Committee on Banking, Housing and Urban Affairs. 

On June 27, 2003, the Senate Committee on Banking, Housing, 

and Urban Affairs reported an original measure, S. 1334, ‘‘The 

Check Truncation Act of 2003,’’ to the Senate (S. Rept. 108–79). On 

June 27, 2003, the Senate laid H.R. 1474 before the Senate by 

unanimous consent. The Senate struck the text of H.R. 1474 and 

substituted the text of S. 1334. The Senate passed H.R. 1474 by 

unanimous consent. 

On July 10, 2003, the House disagreed with the Senate amendment to H.R. 1474 and requested a conference by unanimous consent. The Speaker appointed conferees from the Committee on Financial Services. On July 15, 2003, the Senate insisted on the Senate amendment, agreed to the conference requested by the House, 

and appointed conferees from the Committee on Banking, Housing, 

and Urban Affairs.

On October 1, 2003, the Conferees for the House and Senate met 

(the House chairing) and agreed to the conference report to accompany H.R. 1474 with an amendment. The text of H.R. 3183, as introduced, was also included as section 19 of the conference report. 

The conference report was filed in the House (H. Rept. 108–291) on 

October 1, 2003. 

On October 8, 2003, the House considered the conference report 

to accompany H.R. 1474 pursuant to a unanimous consent agreement. The House then agreed to the conference report accompanying H.R. 1474 by a voice vote. On October 15, 2003, the Senate 

agreed to the conference report by unanimous consent, clearing the 

bill for the White House. The bill was presented to the President 

on October 23, 2003, and signed into law on October 28, 2003, becoming Public Law 108–100. 

FEDERAL DEPOSIT INSURANCE REFORM ACT OF 2003

(H.R. 522) 

To reform the Federal deposit insurance system, and for other 

purposes. 

Summary 

H.R. 522, the Federal Deposit Insurance Reform Act of 2003, will 

preserve the value of insured deposits at insured depository institutions, advance the national priority of enhancing retirement security for all Americans, and ensure that the value, benefit and costs 

of deposit insurance are allocated equitably and fairly. 

The bill merges the Bank Insurance Fund (BIF) and the Savings 

Association Insurance Fund (SAIF); increases the standard maximum deposit insurance limit from $100,000 to $130,000, and indexes it every five years for inflation; doubles the new coverage 

91

level for certain retirement accounts; and increases the coverage 

amount for in-State municipal deposits. Federally chartered credit 

unions are provided with parity in general standard maximum deposit insurance coverage, coverage for retirement accounts and municipal deposits. 

H.R. 522 removes legal constraints on the authority of the Federal Deposit Insurance Corporation (FDIC) to charge risk-based 

premium assessments, so that all insured depository institutions 

pay for the value and benefit of deposit insurance fairly and equitably. 

The legislation authorizes the FDIC to set the ratio of reserves 

to estimated insured deposits within a range of 1.15 to 1.40 percent, replacing the 1.25 percent ‘‘hard target’’ mandated by current 

law. 

The bill also returns assessments in the form of refunds, credits, 

and dividends to insured depository institutions. Dividends are provided to qualified insured depository institutions whenever specified reserve ratios are exceeded. Finally, the legislation directs the 

FDIC to study its administrative and managerial processes and alternative means for administering the deposit insurance system. 

These studies will ensure that the deposit insurance fund and the 

overall deposit insurance system are managed and operated as efficiently and as effectively as possible. 

Legislative History 

H.R. 522 was introduced in the House on February 4, 2003, by 

Mr. Bachus and 27 original cosponsors and referred to the Committee on Financial Services. On February 27, 2003, the bill was 

referred to the Subcommittee on Financial Institutions and Consumer Credit. 

The Committee on Financial Services held a legislative hearing 

on the bill on March 4, 2003. On March 13, 2003, the Committee 

on Financial Services met in open session and ordered the bill to 

be favorably reported to the House, with an amendment, by a voice 

vote. On March 27, 2003, the Committee on Financial Services reported H.R. 522 to the House (H. Rept. 108–50). 

On April 2, 2003, the House considered H.R. 522 pursuant to a 

unanimous consent agreement, and passed the bill, as amended, by 

a record vote of 411 yeas and 11 nays. On April 2, 2003, H.R. 522 

was received in the Senate, read twice, and referred to the Committee on Banking, Housing, and Urban Affairs. 

No further action was taken on this measure during the 108th 

Congress. 

BUSINESS CHECKING FREEDOM ACT OF 2003

(H.R. 758; H.R. 859) 

To allow all businesses to make up to 24 transfers each month 

from interest-bearing accounts, to require the payment of interest 

on reserves held for depository institutions at Federal Reserve 

banks, and for other purposes. 

92

Summary 

H.R. 758, the Business Checking Freedom Act of 2003, permits 

the payment of interest on business checking accounts, increases 

the number of inter-account transfers which may be made from 

business accounts at depository institutions, and authorizes the 

Board of Governors of the Federal Reserve System to pay interest 

on reserves.

The legislation repeals the current prohibition on the payment of 

interest on commercial demand deposit accounts after a two-year 

period, and authorizes the payment of interest on negotiable order 

of withdrawal (NOW) accounts maintained by businesses. The bill 

also authorizes the Federal Reserve to pay interest on the reserves 

that depository institutions maintain at Federal Reserve Banks, 

and eliminates the minimum statutory ratios that currently apply 

to those reserves, thereby giving the Federal Reserve greater flexibility in setting reserve requirements. To offset the revenue loss associated with allowing interest payments on reserve balances, the 

legislation requires that the Federal Reserve remit from its surplus 

fund to the Treasury an amount equal to the estimated annual revenue loss during the first five years the legislation is in effect. The 

legislation increases the number of allowable transfers from interest bearing or dividend earning commercial deposits or accounts to 

24 per month, from the current limit of six, enabling depository institutions to sweep funds between non-interest bearing commercial 

checking accounts and interest bearing accounts on a daily basis. 

Finally, the legislation directs the Board of Governors of the Federal Reserve System to conduct an annual survey of bank fees and 

services. 

Legislative History 

H.R. 758 was introduced in the House on February 13, 2003, by 

Mrs. Kelly and four original cosponsors, and referred to the Committee on Financial Services. On March 5, 2003, the bill was referred to the Subcommittee on Financial Institutions and Consumer Credit. 

On March 5, 2003, the Subcommittee on Financial Institutions 

and Consumer Credit held a legislative hearing on H.R. 758 and 

H.R. 859. On March 13, 2003, the Subcommittee on Financial Institutions and Consumer Credit was discharged from the further consideration of the bill by unanimous consent and the Committee on 

Financial Services met in open session and ordered the bill reported, with an amendment, by a voice vote. The amendment approved by the Committee contained, in part, the language similar 

to H.R. 859. On March 31, 2003, the Committee on Financial Services reported H.R. 758 to the House (H. Rept. 108–53). 

On April 1, 2003, the House considered H.R. 758 under suspension of the rules, and passed the bill, as amended, by a voice vote. 

The bill was received in the Senate, read twice, and referred to the 

Senate Committee on Banking, Housing, and Urban Affairs on 

April 2, 2003. 

The text of H.R. 758, as passed by the House, was also included 

in H.R. 1375, the Financial Services Regulatory Relief Act, which 

passed the House on March 22, 2004. For further action, see the 

entry for H.R. 1375. 

93

FINANCIAL SERVICES REGULATORY RELIEF ACT OF 2004

(H.R. 1375; S. 1947) 

To provide regulatory relief and improve productivity for insured 

depository institutions, and for other purposes. 

Summary 

H.R. 1375, the Financial Services Regulatory Relief Act of 2004, 

is intended to alter or eliminate statutory banking provisions in 

order to reduce the regulatory compliance burden on insured depository institutions and improve their productivity, as well as to 

make needed technical corrections to current statutes. H.R. 1375 is 

also intended to counterbalance the additional regulatory burden 

placed on insured depository institutions in the USA PATRIOT Act 

(Public Law 107–56) to focus their compliance efforts on combating 

money laundering and terrorist financing. 

For banks, H.R. 1375: (1) removes the prohibition on national 

and State banks from expanding across State lines by opening 

branches; (2) allows the use of subordinated debt instruments to 

meet eligibility requirements for national banks to benefit from 

Subchapter S tax treatment; (3) eliminates unnecessary and costly 

reporting requirements on banks regarding lending to bank officials; (4) changes the exemption from the prohibition on management interlocks for banks in metropolitan statistical areas from 

$20 million in assets to $100 million; and (5) streamlines bank 

merger application requirements. 

For savings associations, the bill: (1) removes lending limits on 

small business and auto loans and increases the limit on other 

business loans; (2) gives these institutions parity with banks with 

respect to broker-dealer and investment adviser SEC registration 

requirements; (3) allows Federal thrifts to merge with one or more 

of their non-thrift subsidiaries or affiliates, the same as national 

banks; (4) permits investment in service companies without regard 

to geographic restrictions; and (5) gives thrifts the same authority 

as national and State banks to make investments primarily designed to promote community development. 

For credit unions, the bill: (1) expands the investment authority 

of Federal credit unions; (2) increases the general limit on the term 

of Federal credit union loans from 12 to 15 years; (3) increases the 

limit on investment by Federal credit unions in credit union service 

organizations from one percent to three percent of shares and earnings; (4) permits privately insured credit unions to be eligible to 

join a Federal Home Loan Bank; and (5) eases restrictions on voluntary mergers between healthy credit unions. 

For Federal financial regulatory agencies, the bill includes these 

provisions: (1) provides agencies the discretion to adjust the examination cycle for insured depository institutions to use agency resources in the most efficient manner; (2) allows the agencies to 

share confidential supervisory information concerning an examined 

institution; (3) modernizes agency recordkeeping requirements to 

allow use of optically imaged or computer scanned images; (4) clarifies that agencies may suspend or prohibit individuals charged 

with certain crimes from participation in the affairs of any depository institution and not only the institution with which the indiVerDate jul 14 2003 02:56 Jan 11, 2005 Jkt 039006 PO 00000 Frm 00099 Fmt 6601 Sfmt 6602 E:\HR\OC\HR802.XXX HR802
94

vidual is associated; and (5) strengthens agency enforcement of 

written agreements when an institution-affiliated party or controlling shareholder agrees to provide capital to the depository institution. 

Legislative History 

H.R. 1375 was introduced in the House by Mrs. Capito on March 

20, 2003, with three original cosponsors, and referred to the Committee on Financial Services. On March 27, 2003, the bill was referred to the Subcommittee on Financial Institutions and Consumer Credit. 

On March 27, 2003, the Subcommittee on Financial Institutions 

and Consumer Credit held a legislative hearing on H.R. 1375. On 

April 9, 2003, the Subcommittee on Financial Institutions and Consumer Credit met in open session and approved H.R. 1375 for full 

Committee consideration, as amended, by a voice vote. On May 21, 

2003, the Committee on Financial Services met in open session and 

ordered the bill reported to the House, with an amendment, by a 

voice vote. On June 12, 2003, the Committee on Financial Services 

reported H.R. 1375 to the House, with an amendment (H. Rept. 

108–152, Part I). 

On June 12, 2003, H.R. 1375 was sequentially referred to the 

Committee on the Judiciary through July 14, 2003. On July 14, 

2003, the Committee on the Judiciary reported H.R. 1375 to the 

House (H. Rept. 108–152, Part II). 

On March 16, 2004, the Committee on Financial Services filed a 

supplemental report on H.R. 1375 correcting certain Committee 

votes (H. Rept. 108–152, Part III). On March 17, 2004, the Committee on Rules reported a modified closed rule for the consideration of H.R. 1375 (H. Res. 566). On March 18, 2004, H. Res. 566 

was agreed to by a voice vote. On the same date, the House considered and passed H.R. 1375, as amended, by a record vote of 392 

yeas and 25 nays. On March 22, 2004, H.R. 1375 was received in 

the Senate, read twice, and referred to the Committee on Banking, 

Housing, and Urban Affairs. 

No further action was taken on this measure in the 108th Congress. 

On November 24, 2003, Senator Leahy introduced S. 1947, the 

Preserving Independence of Financial Institution Examinations Act 

of 2003, which contained provisions substantially similar to section 

613 of H.R. 1375, as reported by the Committee on Financial Services. S. 1947 was passed by the Senate by unanimous consent on 

November 24, 2003, and received in the House on November 25, 

2003, where it was referred to the Committee on the Judiciary. On 

December 8, 2003, the Committee on the Judiciary was discharged 

from further consideration of S. 1947, and the bill was considered 

by the House by unanimous consent. The bill passed the House 

without objection, clearing it for the White House. The bill was presented to the President on December 11, 2003, and signed into law 

on December 19, 2003, becoming Public Law 108–198. 

95

UNITED STATES FINANCIAL POLICY COMMITTEE FOR FAIR CAPITAL

STANDARDS ACT

(H.R. 2043) 

To establish a mechanism for developing uniform United States 

positions on issues before the Basel Committee on Banking Supervision at the Bank for International Settlements (BIS), to require 

a review of the most recent recommendation of the Basel Committee for an accord on capital standards, and for other purposes. 

Summary 

H.R. 2043, the United States Financial Policy Committee for Fair 

Capital Standards Act, establishes an inter-agency financial policy 

committee among the Federal financial regulators, chaired by the 

Secretary of the Treasury. This committee is charged with establishing a unified position of the United States prior to entering into 

negotiations in the Basel Committee on Banking Supervision at the 

BIS. The financial policy committee must report its positions to 

Congress prior to entering into negotiations at the BIS. 

Legislative History 

H.R. 2043 was introduced in the House by Mr. Bachus and three 

original cosponsors on May 9, 2003, and was referred to the Committee on Financial Services. On May 23, 2003, the bill was referred to the Subcommittee on Financial Institutions and Consumer Credit. On July 16, 2003, the Subcommittee met in open 

session and approved H.R. 2043, as amended, for full Committee 

consideration by a record vote of 42 yeas and no nays. 

No further action was taken on this measure in the 108th Congress. 

OVERSIGHT ACTIVITIES

FAIR CREDIT REPORTING ACT

In connection with the Committee’s comprehensive review of the 

expiring uniform national standards contained in the Fair Credit 

Reporting Act (FCRA)—which culminated in the enactment of the 

Fair and Accurate Credit Transactions Act (Public Law 108–159)— the Subcommittee on Financial Institutions and Consumer Credit 

held a series of oversight hearings on the national credit reporting 

system during the first session of the 108th Congress. The hearings 

covered a wide variety of subjects, and featured testimony from upwards of 100 witnesses representing a broad range of Federal and 

State government agencies, financial services providers, and consumer groups. In addition to highlighting the importance of uniform national standards to the availability of affordable consumer 

credit in the United States, the hearings focused on solutions to the 

growing crime of identity theft, in which a perpetrator assumes the 

identity of a victim in order to obtain financial products and services in the victim’s name. 

On May 8, 2003, the Subcommittee on Financial Institutions and 

Consumer Credit held a hearing entitled ‘‘The Importance of the 

National Credit Reporting System to Consumers and the U.S. 

Economy.’’ The Subcommittee reviewed the economic benefits of a 

96

national credit reporting system and current consumer protections 

under the FCRA, as well as the importance of a uniform national 

credit system to the retail operations of commercial users and furnishers of credit reporting data. 

On June 4, 2003, the Subcommittee on Financial Institutions and 

Consumer Credit held a hearing entitled ‘‘Fair Credit Reporting 

Act: How it Functions for Consumers and the Economy.’’ Among 

the topics covered at this hearing were the role of the States in enforcing the FCRA; how credit reports, credit scores, and 

prescreened information are used by the lending, mortgage, consumer finance, insurance, and non-financial industries; the accuracy of credit reports; and the role of national uniform standards 

in improving markets for consumers, including how such uniformity affects the availability, affordability, and timeliness of financial products and services. 

On June 12, 2003, the Subcommittee on Financial Institutions 

and Consumer Credit held a hearing entitled ‘‘The Role of FCRA 

in the Credit Granting Process.’’ The hearing examined the use of 

credit reports in the mortgage lending process as well as in other 

forms of consumer lending, including credit cards and bank loans. 

On June 17, 2003, the Subcommittee on Financial Institutions 

and Consumer Credit held a hearing entitled ‘‘The Role of FCRA 

in Employee Background Checks and the Collection of Medical Information.’’ The Subcommittee examined the role of the FCRA in 

employee background checks and investigations of employee misconduct, as well as in the collection and use of medical information 

by financial services firms. Much of the testimony at this hearing 

focused on the ill effects of a 1999 Federal Trade Commission staff 

opinion letter that had the unintended consequence of deterring 

employers from using outside firms to investigate allegations of 

workplace misconduct, including racial discrimination and sexual 

harassment claims. 

On June 24, 2003, the Subcommittee on Financial Institutions 

and Consumer Credit held its final hearing on the FCRA, entitled 

‘‘Fighting Identity Theft—The Role of FCRA.’’ The hearing highlighted current enforcement efforts to apprehend and prosecute 

identity thieves, the experiences of consumers victimized by identity theft, and innovative private sector efforts to prevent identity 

theft and assist victims. 

FIGHTING FRAUD: IMPROVING INFORMATION SECURITY

On April 3, 2003, the Subcommittees on Oversight and Investigations and Financial Institutions and Consumer Credit held a joint 

hearing entitled ‘‘Fighting Fraud: Improving Information Security’’

to examine three specific cases in which breaches of data security 

or failures of internal controls resulted in the inadvertent disclosure of consumers’ personal financial information. The hearing focused on strategies for coordinating the efforts of credit issuers, 

third-party vendors that process transactions, credit bureaus, and 

law enforcement agencies in limiting harm to consumers when data 

security is breached. Witnesses testifying at the hearing included 

representatives of the Federal Bureau of Investigation, the U.S. Secret Service, and the Federal Trade Commission, as well as industry and consumer groups. 

97

FINANCING EMPLOYEE OWNERSHIP PROGRAMS: AN OVERVIEW

On June 10, 2003, the Subcommittee on Financial Institutions 

and Consumer Credit held a hearing entitled ‘‘Financing Employee 

Ownership Programs: An Overview’’ to examine proposals to provide commercial financial institutions incentives to finance employee buy-outs through the creation of Employee Stock Ownership 

Plans (ESOPS) or Eligible Worker Owned Cooperatives (EWOCs). 

The hearing explored the merits of creating a U.S. Employee Ownership Bank within the Treasury Department to provide loan guarantees, subordinated loans, technical assistance and education to 

employees who would like to buy their own companies by establishing an ESOP or EWOC. Witnesses at the hearing included representatives of ESOP trade associations, individuals who have participated in employee buy-outs, and experts in the field. 

SERVING THE UNDERSERVED: INITIATIVES TO BROADEN ACCESS TO

THE FINANCIAL MAINSTREAM

On June 26, 2003, the Subcommittee on Financial Institutions 

and Consumer Credit held a hearing entitled ‘‘Serving the Underserved: Initiatives to Broaden Access to the Financial Mainstream’’

on initiatives to make financial products and services more accessible to the ‘‘unbanked,’’ those who have not historically taken advantage of such services. The hearing focused on innovative strategies in the public and private sectors for expanding access to mainstream financial services and promoting greater financial awareness. Among the issues addressed were the increasing use of international remittances and the growing acceptance of consular identification cards by banks and other financial institutions as a means 

of customer verification. Witnesses testifying at the hearing included officials from the Treasury Department and the National 

Credit Union Administration, as well as representatives of various 

financial institutions and a national non-profit self-help organization. 

SUBPRIME LENDING

The Subcommittees on Housing and Community Opportunity 

and Financial Institutions and Consumer Credit held three joint 

hearings on issues related to the topic of predatory lending. 

On November 5, 2003, the Subcommittee on Financial Institutions and Consumer Credit and the Subcommittee on Housing and 

Community Opportunity held a joint hearing entitled ‘‘Protecting 

Homeowners: Preventing Abusive Lending While Preserving Access 

to Credit’’ on the subprime mortgage lending industry in the 

United States. The hearing focused on ways to eliminate abusive 

practices in the mortgage origination process and in the secondary 

mortgage market while preserving and promoting access to affordable credit for consumers. Witnesses testifying at the hearing included a State attorney general and representatives of various industry and consumer groups. 

On March 30, 2004, the Subcommittee on Housing and Community Opportunity and the Subcommittee on Financial Institutions 

and Consumer Credit held a hearing entitled ‘‘Subprime Lending: 

Defining the Market and its Consumers’’ to examine the growing 

98

subprime mortgage lending industry in the United States, with a 

particular focus on the dynamics of this market and its ability to 

offer more customized mortgage products to meet customers’ varying credit needs. In addition, the hearing focused on defining a typical subprime customer, and on the advantages and disadvantages 

that the subprime market poses to the financial security of these 

customers. Witnesses testifying at this hearing included leading experts in the field, as well as representatives from various consumer 

and industry groups. 

On June 23, 2004, the Subcommittees on Housing and Community Opportunity and Financial Institutions and Consumer Credit 

held a joint hearing entitled ‘‘Promoting Homeownership by Ensuring Liquidity in the Subprime Mortgage Market’’ to explore the role 

that the secondary mortgage market plays in providing liquidity to 

the subprime lending industry and creating homeownership opportunities for American consumers. Much of the testimony centered 

on the appropriate standard for assigning liability to secondary 

market participants. Witnesses testifying at this hearing included 

a representative of a State attorney general’s office, various industry groups, a consumer group, and an expert in the field. 

CUTTING THROUGH RED TAPE: REGULATORY RELIEF FOR AMERICA’S

COMMUNITY-BASED BANKS

On May 12, 2004, the Subcommittee on Financial Institutions 

and Consumer Credit held a hearing entitled ‘‘Cutting Through 

Red Tape: Regulatory Relief for America’s Community-Based 

Banks’’ on how to strengthen and preserve the role that small 

banks serve in their communities, by reducing or eliminating the 

burdens imposed on those institutions by outdated or unnecessary 

regulatory requirements. The Financial Services Regulatory Relief 

Act (H.R. 1375), which passed the House of Representatives earlier 

in the year, was also discussed. Witnesses at the hearing included 

representatives of the Department of the Treasury, the Federal Deposit Insurance Corporation, the Conference of State Bank Supervisors, and industry and consumer groups. 

CREDIT UNION REGULATORY IMPROVEMENTS

On July 20, 2004, the Subcommittee on Financial Institutions 

and Consumer Credit held a hearing entitled ‘‘Credit Union Regulatory Improvements’’ to examine the regulatory challenges faced 

by federal and state-chartered credit unions. The hearing focused 

on the state of the credit union industry, and on specific legislative 

proposals to improve the regulatory environment in which credit 

unions operate. Witnesses at the hearing included representatives 

of the National Credit Union Administration, as well as industry 

and consumer groups. 

FINANCIAL SERVICES ISSUES: A CONSUMER’S PERSPECTIVE

On September 15, 2004, the Subcommittee on Financial Institutions and Consumer Credit held a hearing entitled ‘‘Financial Services Issues: A Consumer’s Perspective’’ to examine a broad range 

of consumer protection issues as requested by various Committee 

members throughout the year. Among the issues discussed were reVerDate jul 14 2003 02:56 Jan 11, 2005 Jkt 039006 PO 00000 Frm 00104 Fmt 6601 Sfmt 6602 E:\HR\OC\HR802.XXX HR802
99

fund anticipation loans, credit and debit card interchange fees, 

overdraft protection, performance-based pricing and use of external 

delinquencies in the setting of credit card rates, ATM fraud, and 

financial literacy. Witnesses testifying at this hearing included representatives from industry and consumer groups. 

BASEL ACCORD

On June 22, 2004, the Subcommittee on Financial Institutions 

and Consumer Credit held an oversight hearing entitled, ‘‘The New 

Basel Accord: Private Sector Perspectives.’’ The Subcommittee has 

closely monitored the Basel II negotiations process and has been 

interested in the impact this agreement will have on financial institutions in the U.S., as well as competition in international markets. The Subcommittee heard testimony from bank executives representing large and small institutions that may be affected by the 

proposed Basel II Accord, as well as from a financial trade association. 

HEARINGS HELD

The Business Checking Freedom Act of 2003. Legislative hearing 

on the Business Checking Freedom Act of 2003, H.R. 758 and H.R. 

859. March 5, 2003. PRINTED, serial no. 108–8. 

The Financial Services Regulatory Relief Act of 2003. Legislative 

hearing on H.R. 1375, the Financial Services Regulatory Relief Act 

of 2003. March 27, 2003. PRINTED, serial no. 108–15. 

Fighting Fraud: Improving Information Security. Joint hearing 

with the Subcommittee on Oversight and Investigations entitled 

‘‘Fighting Fraud: Improving Information Security.’’ April 3, 2003. 

PRINTED, serial no. 108–19. 

Check Clearing for the 21st Century Act. Legislative hearing on 

H.R. 1474, the Check Clearing for the 21st Century Act. April 8, 

2003. PRINTED, serial no. 108–20. 

The Importance of the National Credit Reporting System to Consumers and the U.S. Economy. Hearing entitled ‘‘The Importance 

of the National Credit Reporting System to Consumers and the 

U.S. Economy.’’ May 8, 2003. PRINTED, serial no. 108–26. 

Fair Credit Reporting Act: How it Functions for Consumers and 

the Economy. Hearing entitled ‘‘The Fair Credit Reporting Act: 

How it Functions for Consumers and the Economy.’’ June 4, 2003. 

PRINTED, serial no. 108–33. 

Financing Employee Ownership Programs: An Overview. Hearing 

entitled ‘‘Financing Employee Ownership Programs: An Overview.’’

June 10, 2003. PRINTED, serial no. 108–35. 

The Role of FCRA in the Credit Granting Process. Hearing entitled ‘‘The Role of FCRA in the Credit Granting Process.’’ June 12, 

2003. PRINTED, serial no. 108–37. 

The Role of FCRA in Employee Background Checks and the Collection of Medical Information. Hearing entitled ‘‘The Role of FCRA 

in Employee Background Checks and the Collection of Medical Information.’’ June 17, 2003. PRINTED, serial no. 108–38. 

The New Basel Accord—In Search of a Unified U.S. Position.

Hearing entitled ‘‘The New Basel Accord—In Search of a Unified 

U.S. Position.’’ June 19, 2003. PRINTED, serial no. 108–40. 

100

Fighting Identity Theft—The Role of FCRA. Hearing entitled ‘‘Fighting Identity Theft—The Role of FCRA.’’ June 24, 2003. 

PRINTED, serial no. 108–42. 

Serving the Underserved: Initiatives to Broaden Access to the Financial Mainstream. Hearing entitled ‘‘Serving the Underserved: 

Initiatives to Broaden Access to the Financial Mainstream.’’ June 

26, 2003. PRINTED, serial no. 108–45. 

Protecting Homeowners: Preventing Abusive Lending While Preserving Access to Credit. Joint hearing with the Subcommittee on 

Housing and Community Opportunity entitled ‘‘Protecting Homeowners: Preventing Abusive Lending While Preserving Access to 

Credit.’’ November 5, 2003. PRINTED, serial no. 108–62. 

Subprime Lending: Defining the Market and Its Customers. Joint 

hearing with the Subcommittee on Housing and Community Opportunity entitled ‘‘Subprime Lending: Defining the Market and its 

Customers.’’ March 30, 2004. PRINTED, serial no. 108–76. 

Cutting Through the Red Tape: Regulatory Relief for America’s 

Community-Based Banks. Hearing entitled ‘‘Cutting Through the 

Red Tape: Regulatory Relief for America’s Community-Based 

Banks.’’ May 12, 2004. Serial no. 108–85. 

The New Basel Accord: Private Sector Perspectives. Hearing entitled ‘‘The New Basel Accord: Private Sector Perspectives.’’ June 22, 

2004. Serial no. 108–96. 

Promoting Homeownership by Ensuring Liquidity in the 

Subprime Mortgage Market. Joint hearing with the Subcommittee 

on Housing and Community Opportunity entitled ‘‘Promoting 

Homeownership by Ensuring Liquidity in the Subprime Mortgage 

Market.’’ June 23, 2004. PRINTED, serial no. 108–97. 

Credit Union Regulatory Improvements. Hearing entitled ‘‘Credit 

Union Regulatory Improvements.’’ July 20, 2004. Serial no. 108– 103. 

Financial Services Issues: A Consumer’s Perspective. Hearing entitled ‘‘Financial Services Issues: A Consumer’s Perspective.’’ September 15, 2004. Serial no. 108–111.

(101)

SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY

(Ratio: 14–12)

ROBERT W. NEY, Ohio, Chairman

MARK GREEN, Wisconsin 

Vice Chairman

RICHARD H. BAKER, Louisiana 

PETER T. KING, New York 

WALTER B. JONES, Jr., North Carolina 

DOUG OSE, California 

PATRICK J. TOOMEY, Pennsylvania 

CHRISTOPHER SHAYS, Connecticut 

GARY G. MILLER, California 

MELISSA A. HART, Pennsylvania 

PATRICK J. TIBERI, Ohio 

KATHERINE HARRIS, Florida 

RICK RENZI, Arizona 

(Vacancy)

MICHAEL G. OXLEY, Ohio 

ex officio 

MAXINE WATERS, California 

NYDIA M. VELA ́ ZQUEZ, New York 

JULIA CARSON, Indiana 

BARBARA LEE, California 

MICHAEL E. CAPUANO, Massachusetts 

BERNARD SANDERS, Vermont*

MELVIN L. WATT, North Carolina 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

ARTUR DAVIS, Alabama 

BARNEY FRANK, Massachusetts 

ex officio

Mr. Sanders is an independent, but caucuses with the Democratic Caucus.

LEGISLATIVE ACTIVITIES

TORNADO SHELTERS ACT

Public Law 108–146 (H.R. 23) 

To authorize communities to use community development block 

grant funds for construction of tornado-safe shelters in manufactured home parks. 

Summary 

H.R. 23 authorizes as an eligible activity, funds from the Community Development Block Grant program to be used to construct 

or improve tornado-safe shelters located in manufactured housing 

parks. To be eligible shelters must: (1) be located in a neighborhood 

or park that has twenty or more units; (2) consists predominately 

of low-and moderate-income people; (3) be in an area where a tornado occurred within the current or three previous fiscal years; and 

(4) be located in a neighborhood or park that has a warning siren. 

Finally, each shelter must comply with HUD’s standards for construction and safety, and be of sufficient size to accommodate all 

residents of the manufactured housing park at one time. 

Legislative History 

H.R. 23, the Tornado Shelters Act, was introduced by Mr. Bachus 

on January 7, 2003, and referred to the Committee on Financial 

Services. The bill was referred to the Subcommittee on Housing 

and Community Opportunity on February 27, 2003. 

On May 7, 2003, the Subcommittee considered and approved 

H.R. 23 for full Committee consideration, as amended. On May 21, 

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2003, the full Committee met in open session and ordered the bill 

to be reported with a favorable recommendation to the House, with 

an amendment, by a voice vote. On June 12, 2003, the Committee 

reported the bill to the House, with an amendment (H. Rept. 108– 151). 

On July 21, 2003, the House considered the bill under suspension 

of the rules and passed the bill with and amendment by a voice 

vote. On July 22, 2003, H.R. 23 was received in the Senate, read 

twice, and referred to the Senate Committee on Banking, Housing, 

and Urban Affairs. 

On November 18, 2003, the Senate Committee on Banking, 

Housing, and Urban Affairs was discharged from the further consideration of the bill and the Senate passed the bill without amendment by unanimous consent. 

The bill was presented to the President on November 24, 2003, 

and signed into law on December 3, 2003, becoming Public Law 

108–146. 

AMERICAN DREAM DOWNPAYMENT ACT OF 2003

Public Law 108–186 (S. 811; H.R. 1276; H.R. 1443; H.R. 1614; H.R. 

1985; H.R. 2422; S. 381, S. 1714) 

To authorize the Secretary of HUD to make grants to participating jurisdictions for downpayment assistance to low-income, 

first-time home buyers. 

Summary 

H.R. 1276, the American Dream Downpayment Act, amends the 

Cranston-Gonzalez National Affordable Housing Act to authorize 

the Secretary of Housing and Urban Development to make grants 

to participating jurisdictions for downpayment assistance to low-income, first-time home buyers. The program will be administered 

under HUD’s Home Investment Partnerships Program (HOME), an 

existing grant program that helps communities nationwide expand 

the supply of standard, affordable housing for low and very low income families. 

The legislation, as enacted, also included provisions similar to 

H.R. 1443, the Access to Affordable Mortgages Act, H.R. 1614, the 

HOPE VI Program Reauthorization and Small Community 

Mainstreet Rejuvenation and Housing Act of 2003, H.R. 1985 and 

S. 1714, both entitled the FHA Multifamily Loan Limit Adjustment 

Act of 2003, H.R. 2422, the Insular Areas Community Development 

Act, and S. 381, the Living Equitably: Grandparents Aiding Children and Youth Act of 2003. For descriptions of the provisions of 

those measures, see the entries for those bills. 

Legislative History 

H.R. 1276, the American Dream Downpayment Act, was introduced on March 13, 2003, by Ms. Harris and 31 original cosponsors 

and referred to the Committee on Financial Services. The bill was 

referred to the Subcommittee on Housing and Community Opportunity on March 28, 2003. 

The Subcommittee held a legislative hearing on April 8, 2003. On 

May 7, 2003, the Subcommittee met in open session and approved 

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H.R. 1276 for full Committee consideration as amended. The full 

Committee met in open session on May 21, 2003, and ordered the 

bill favorably reported to the House, with an amendment, by a 

voice vote. On June 19, 2004, the Committee reported the bill to 

the House, with an amendment (H. Rept. 108–164). 

On October 1, 2003, the House considered H.R. 1276 under suspension of the rules and passed the bill with an amendment by a 

voice vote. On October 2, 2003, this bill was received in the Senate, 

read twice, and referred to the Committee on Banking, Housing, 

and Urban Affairs. 

The Senate companion legislation, S. 811, was introduced on 

April 8, 2003, by Senator Allard, read twice, and referred to the 

Senate Committee on Banking, Housing, and Urban Affairs. The 

Senate Committee on Banking, Housing, and Urban Affairs ordered the bill favorably reported to the Senate with an amendment 

on October 15, 2003, although the bill was never reported. 

On November 24, 2003, the Senate Committee on Banking, 

Housing, and Urban Affairs was discharged from the further consideration of S. 811, and the Senate passed the bill with an amendment by unanimous consent. In addition to the provisions of the 

original bill, the amendment added provisions similar to H.R. 1443, 

the Access to Affordable Mortgages Act, H.R. 1614, the HOPE VI 

Program Reauthorization and Small Community Mainstreet Rejuvenation and Housing Act of 2003, H.R. 1985 and S. 1714, both entitled the FHA Multifamily Loan Limit Adjustment Act of 2003, 

H.R. 2422, the Insular Areas Community Development Act, and S. 

381, the Living Equitably: Grandparents Aiding Children and 

Youth Act of 2003. This amendment was the result of negotiations 

between the House and Senate. 

On November 25, 2003, the House received S. 811 and the bill 

was held at the desk. The House passed the bill without further 

amendment by unanimous consent on December 8, 2003, clearing 

the bill for the White House. 

S. 811 was presented to the President on December 11, 2003, and 

signed into law on December 16, 2003, becoming Public Law 108–

186. 

HOPE VI PROGRAM REAUTHORIZATION AND SMALL COMMUNITY MAIN

STREET REJUVENATION AND HOUSING ACT OF 2003

Public Law 108–186 (S. 811; H.R. 1614) 

To reauthorize the HOPE VI program for revitalization of severely distressed public housing and to provide financial assistance 

under such program for main street revitalization or redevelopment 

projects in smaller communities to support the development of affordable housing for low-income families in connection with such 

projects, and for other purposes. 

Summary 

The HOPE VI Program Reauthorization and Small Community 

Mainstreet Rejuvenation and Housing Act of 2003, amends the 

United States Housing Act of 1937 to revise criteria for HOPE VI 

(urban revitalization demonstration program) grants, including adVerDate jul 14 2003 02:56 Jan 11, 2005 Jkt 039006 PO 00000 Frm 00109 Fmt 6601 Sfmt 6602 E:\HR\OC\HR802.XXX HR802
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dition of criteria regarding tenant displacement, existing tenant occupancy priority, and timeliness of project completion. 

The bill also revises the definition of ‘‘severely distressed public 

housing’’ to include: (1) buildings or projects that include very lowincome elderly or non-elderly disabled persons; and (2) areas lacking sufficient affordable housing, transportation, supportive services, economic opportunity, schools, civic and religious institutions, 

and public services. 

In addition to reauthorizing the program through September 30, 

2005, the bill includes provisions to allow five percent of HOPE VI 

funds to assist smaller communities to provide affordable low-income housing in connection with main street revitalization or redevelopment projects. The legislation also authorizes main street 

grants (maximum $1 million per year) to smaller communities for 

affordable low-income housing in a commercial area in connection 

with an eligible project. The legislation requires that a project be 

focused on: (1) joint public-private revitalization or redevelopment 

of a historic or traditional commercial area; and (2) affordable 

housing rather than severely distressed public housing.

For purposes of the legislation, the term ‘‘smaller community’’ is 

defined as a local government unit that: (1) has a population of 

under 30,000, and is without a public housing agency; or (2) has 

a public housing agency that administers 100 or fewer public housing dwelling units; and the term ‘‘affordable housing’’ is defined as 

rental or homeownership units that are made available for initial 

occupancy subject to the same income and occupant contribution 

rules as dwelling units in public housing projects assisted with 

HOPE VI grants. 

Legislative History 

H.R. 1614, the HOPE VI Program Reauthorization and Small 

Community Mainstreet Rejuvenation and Housing Act of 2003, was 

introduced on April 3, 2003, by Mr. Leach and three original cosponsors and referred to the Committee on Financial Services. It 

was referred to the Subcommittee on Housing and Community Opportunity on May 7, 2003. 

The Subcommittee considered and approved the bill for full Committee consideration, as amended, on May 21, 2003, by a voice vote. 

On June 19, 2003, the full Committee met in open session and ordered H.R. 1614 favorably reported to the House, with an amendment, by a voice vote. The Committee reported H.R. 1614 to the 

House, with an amendment, on June 19, 2003 (H. Rept. 108–165). 

While no further action was taken directly on this measure, provisions similar to those of H.R. 1614 were ultimately incorporated 

into S. 811, the American Dream Downpayment Act. For further 

action, see the entry for the American Dream Downpayment Act. 

FHA MUTIFAMILY LOAN LIMIT ADJUSTMENT ACT OF 2003

Public Law 108–186 (S. 811; H.R. 1985; S. 1714) 

To amend the National Housing Act to increase the maximum 

mortgage amount limit for FHA-insured mortgages for multifamily 

housing located in high-cost areas. 

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Summary 

The legislation amends the National Housing Act to increase 

Federal Housing Administration (FHA) project-based loan limits in 

high-cost areas for: (1) rental housing; (2) cooperative housing; (3) 

rehabilitation and neighborhood conservation housing; (4) moderate 

income and displaced family housing; (5) housing for the elderly; 

and (6) condominiums. In addition, the bill increases: (1) ‘‘amount 

per space’’ rental housing mortgage limits; and (2) certain cooperative housing mortgage limits. 

Legislative History 

H.R. 1985 was introduced by Mr. Gary G. Miller of California on 

May 6, 2003, with three original cosponsors and referred to the 

Committee on Financial Services. On May 6, 2003, the bill was referred to the Subcommittee on Housing and Community Opportunity on May 23, 2003. 

On July 22, 2003, the Subcommittee held a legislative hearing, 

immediately after which the Subcommittee considered and approved the bill, as amended, for full Committee consideration by a 

voice vote. On July 23, 2003, the full Committee met in open session and ordered H.R. 1985 favorably reported to the House, with 

an amendment, by a voice vote. On September 3, 2003, the Committee reported this bill, with an amendment, to the House (H. 

Rept. 108–247). 

On October 7, 2003, the House considered the measure under 

suspension of the rules and passed the bill, with an amendment, 

by a voice vote. On October 14, 2003, this bill was received in the 

Senate, read twice, and referred to the Committee on Banking, 

Housing, and Urban Affairs. 

The Senate companion legislation, S. 1714, was introduced by 

Senator Corzine on October 3, 2003, read twice, and referred to the 

Senate Committee on Banking, Housing, and Urban Affairs. 

While no further action was taken directly on either of these 

measures, provisions similar to those of H.R. 1985 and S. 1714 

were ultimately incorporated into S. 811, the American Dream 

Downpayment Act. For further action, see the entry for the American Dream Downpayment Act. 

ACCESS TO AFFORDABLE MORTGAGES ACT

Public Law 108–186 (S. 811; H.R. 1443) 

To amend section 251 of the National Housing Act to enable 

homebuyers to make use of the authority of the Secretary of Housing and Urban Development to insure hybrid adjustable rate mortgages. 

Summary 

Currently, the Federal Housing Administration may insure a hybrid adjustable rate mortgage (ARM) if the initial interest rate remains fixed for at least the first three years of the mortgage. The 

annual adjustment of the rate may be no more than one percent. 

A hybrid adjustable rate mortgage has a fixed rate for a set period 

of time (such as one, three, five, or seven years), after which the 

rate will be adjusted every year. Under current law, the first adVerDate jul 14 2003 02:56 Jan 11, 2005 Jkt 039006 PO 00000 Frm 00111 Fmt 6601 Sfmt 6602 E:\HR\OC\HR802.XXX HR802
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justment to an FHA ARM can be more than one percent if the fixed 

term is more than five years. The adjusted rate cannot be more 

than five percentage points above the initial fixed rate. The bill 

would make a technical change from a five to three year fixed term 

threshold before an FHA ARM interest rate adjustment could be 

more than one percent. This change will allow the FHA to offer 

more flexible 5/1 hybrid ARMs. 

Legislative History 

H.R. 1443, the Access to Affordable Mortgages Act, was introduced on March 26, 2003, by Mr. Calvert and three original cosponsors and referred to the House Financial Services Committee. On 

April 10, 2003, this bill was referred to the Subcommittee on Housing and Community Opportunity. 

While no action was taken directly on this legislation, provisions 

similar to those of H.R. 1443 were ultimately incorporated into S. 

811, the American Dream Downpayment Act. For further action, 

see the entry for the American Dream Downpayment Act. 

CDBG/SECTION 108 LOAN GUARANTEE AUTHORITY FOR INSULAR AREAS

Public Law 108–186 (S. 811; H.R. 2422) 

To authorize the Secretary of Housing and Urban Development 

to guarantee community development loans to the insular areas. 

Summary 

H.R. 2422 amends the Housing and Community Development Act 

of 1974 to make Guam, the Virgin Islands, American Samoa, and 

the Commonwealth of the Northern Mariana Islands (CNMI) eligible for community development loan guarantees by including them 

within the definition of ‘‘eligible public entity.’’

However, the language that ultimately was included in Public 

Law 108–186 authorizes the CDBG allotments to Guam, American 

Samoa, the Virgin Islands, and the CNMI under section 106 as opposed to section 107, as current law provides. The move to section 

106 makes the CDBG funds to insular areas as certain as any 

other CDBG recipient, enabling HUD to estimate future CDBG receipts, whether purely on a population basis as is currently done 

or using a new formula based on additional census data. This allows insular areas to utilize funds under the section 108 loan guarantee program. 

In order to make funds available under section 108, HUD needs 

to ensure future repayment of the loans. The primary method is 

the loan recipient secures the loan on the basis of the stream of future CDBG receipts. If the funding is merely discretionary (as is 

the case under section 107), additional security is needed, as well 

as charging a higher interest rate to protect the investment. Since 

the two primary sources of income for insular areas are tourism 

and Federal funding, such as tax receipts and military base support, HUD is reluctant to make a section 108 loan commitment 

without future CDBG receipts. 

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Legislative History 

H.R. 2422 was introduced on June 11, 2003, by Ms. Bordallo and 

referred to the Committee on Financial Services. This bill was referred to the Subcommittee on Housing and Community Opportunity on June 23, 2003. 

While no action was taken directly on this legislation, provisions 

similar to those of H.R. 2422 were ultimately incorporated into S. 

811, the American Dream Downpayment Act. For further action, 

see the entry for the American Dream Downpayment Act. 

GNMA AUTHORIZATION TO SECURITIZE RURAL HOUSING SERVICE

MULTIFAMILY LOANS

Public Law 108–199 (H.R. 2673; H.R. 2740) 

To amend the National Housing Act to authorize the Government 

National Mortgage Association to guarantee securities backed by 

loans guaranteed by the Rural Housing Service under section 538 

of the Housing Act of 1949. 

Summary 

H.R. 2740, the Rural Multifamily Housing Loan Guarantee and 

Ginnie Mae Corrections Act, amends the National Housing Act to 

clarify that the Government National Mortgage Association (Ginnie 

Mae) may guarantee securities backed by loans insured or guaranteed by the Rural Housing Service under title V of the Housing Act 

of 1949. Current law refers only to loans insured under title V. 

Legislative History 

H.R. 2740 was introduced by Mr. Bereuter and three original cosponsors on July 15, 2003, and referred to the Committee on Financial Services. The bill was referred to the Subcommittee on 

Housing and Community Opportunity on August 4, 2003. 

While no action was taken directly on the legislation, provisions 

similar to those in H.R. 2740 were included as section 774 of title 

VII of division A of H.R. 2673, the Consolidated Appropriations Act, 

2004. The conference report to accompany H.R. 2673 was filed in 

the House on November 25, 2003 (H. Rept. 108–401). The House 

agreed to the conference report on December 8, 2003, by a record 

vote of 242 yeas and 176 nays. The Senate began consideration of 

the conference report on December 9, 2003, and invoked cloture on 

January 22, 2004, by a roll call vote of 61 yeas and 32 nays. The 

Senate agreed to the conference report on January 22, 2004 by a 

roll call vote of 65 yeas and 28 nays. 

The bill was presented to the President on January 22, 2004, and 

signed into law on January 23, 2004, becoming Public Law 108–

199. 

ENERGY EFFICIENT HOUSING TECHNICAL CORRECTION ACT

Public Law 108–213 (H.R. 3724) 

To amend Section 220 of the National Housing Act to make a 

technical correction to restore allowable increases in the maximum 

mortgage limits for FHA-insured mortgages for multifamily housVerDate jul 14 2003 02:56 Jan 11, 2005 Jkt 039006 PO 00000 Frm 00113 Fmt 6601 Sfmt 6602 E:\HR\OC\HR802.XXX HR802
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ing projects to cover increased costs of installing a solar energy system or other residential energy conservation measures. 

Summary 

Congress passed the FHA Downpayment Simplification Act in 

2002 which streamlined the downpayment process and increased 

the base mortgage limits for FHA-insured loans. This legislation restricted projects eligible for increased loan limits to those projects 

containing fewer than five units and incorporating improved energy 

efficient systems. As a result, housing projects with five or fewer 

units were permitted FHA insurance in amounts up to 20 percent 

higher than the standard limit for the purpose of making environmental improvements. H.R. 3724 makes a technical change to 

amend the National Housing Act by allowing the Secretary of HUD 

to increase FHA loan limits from the current 20 percent up to 30 

percent, in order to account for the increased cost of a solar energy 

system or other residential energy conservation measures. 

Legislative History 

H.R. 3724, the Energy Efficient Housing Technical Correction 

Act, was introduced by Mr. Shays on January 21, 2004, and referred to the Committee on Financial Services. 

On February 3, 2004, H.R. 3724 was considered under suspension of the rules and passed the House by a voice vote. The bill was 

received in the Senate on February 4, 2004, read twice, and referred to the Senate Committee on Banking, Housing, and Urban 

Affairs. On March 12, 2004, the Senate Committee on Banking, 

Housing, and Urban Affairs was discharged from the further consideration of the bill and it was passed by the Senate by unanimous consent, clearing the bill for the White House. H.R. 3724 was 

presented to the President on March 23, 2004, and signed into law 

on April 1, 2004, becoming Public Law 108–213. 

BUNNING-BEREUTER-BLUMENAUER FLOOD INSURANCE REFORM ACT OF

2004

Public Law 108–264 (H.R. 253, S. 2238) 

To amend the National Flood Insurance Act of 1968 to reduce 

losses to properties for which repetitive flood insurance claim payments have been made. 

Summary 

The Flood Insurance Reform Act of 2004 requires those persons 

living in frequently-flooded areas to reduce their risk of flooding. In 

addition to reauthorizing the National Flood Insurance Program 

(NFIP) through September 30, 2008, the legislation addresses severe repetitive loss properties through a pilot program for mitigation of these properties. Under this legislation, the owner of a severe repetitive loss property is charged a rate closer to the actuarial level for a flood insurance policy if two conditions prevail. The 

first condition is that a property must be classified as a severe repetitive loss property, and the second condition is that the owner 

of the property must have refused a government-sponsored mitigation offer. 

109

Severe repetitive loss properties are defined in the legislation as 

properties for which four or more separate flood insurance claims 

payments have been made under the National Flood Insurance 

Program, with the amount of each of those claims exceeding 

$5,000, and with the cumulative amount of such claims payments 

exceeding $20,000; or for which two or more separate NFIP claims 

payments cumulatively exceed the value of the insured property. 

If an offer for mitigation under the pilot program (such as an elevation of the structure or a buy-out of the property) is refused and 

an appeal is unsuccessful, rates for severe repetitive loss properties 

will be increased by 50 percent. Properties will be subject to additional 50 percent increases for each subsequent flood event where 

claims payments exceed $1500. 

The legislation authorizes up to an additional $40 million for fiscal years 2004, 2005, 2006, 2007, and 2008 to be transferred from 

the National Flood Insurance Fund to the National Flood Mitigation Fund for severe repetitive loss properties for the pilot program 

and will remain available until expended. 

Legislative History

H.R. 253 was introduced by Mr. Bereuter on January 8, 2003 

with four original cosponsors and referred to the Committee on Financial Services. On February 27, 2003, the bill was referred to the 

Subcommittee on Housing and Community Opportunity. 

On July 23, 2003, the Subcommittee was discharged from the 

further consideration of the bill and the full Committee met in 

open session to consider the bill. The Committee ordered H.R. 253 

reported to the House with a favorable recommendation, with an 

amendment, by a voice vote. On September 5, 2003, the Committee 

reported the bill to the House with an amendment (H. Rept. 108–

266). 

The House considered the bill under suspension of the rules on 

November 20, 2003, and passed H.R. 253, with an amendment, by 

a record vote of 352 yeas and 67 nays. On December 9, 2003, H.R. 

253 was received in the Senate, read twice, and referred to the 

Senate Committee on Banking, Housing, and Urban Affairs. 

On March 25, 2004, S. 2238, the Bunning-Bereuter-Blumenauer 

Flood Insurance Reform Act of 2004 was introduced by Senator 

Bunning with five original cosponsors. It was read twice and referred to the Senate Committee on Banking, Housing, and Urban 

Affairs. On May 13, 2004, the bill was reported to the Senate as 

amended by the Senate Committee on Banking, Housing, and 

Urban Affairs with a written report (S. Rept. 108–262). 

The Senate passed S. 2238, with an amendment, by unanimous 

consent on June 15, 2004. On June 16, 2004, S. 2238 was received 

in the House. On June 21, 2004, the bill was considered under suspension of the rules and passed the House by a voice vote. Certain 

corrections were made to the enrollment of the bill pursuant to

H. Con. Res. 458, which passed both the House and Senate by 

unanimous consent on June 21, 2004. 

On June 23, 2004, this legislation was presented to the President 

signed into law on June 30, 2004, becoming Public Law 108–264. 

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HELPING HANDS FOR HOMEOWNERSHIP ACT OF 2004

Public Law 108–285 (H.R. 4363) 

To facilitate self-help housing homeownership opportunities. 

Summary 

H.R. 4363, the Helping Hands for Homeownership Act of 2004, 

makes a technical correction to the Housing Opportunity Program 

Extension Act of 1996 to allow families who receive homes from 

groups such as Habitat for Humanity (Habitat) and the Housing 

Assistance Council (HAC) to fulfill the ‘‘sweat equity’’ requirement 

for receiving Self-Help Homeownership Opportunity Program 

(SHOP) funds not only by helping to build their own homes, but 

also by helping to build other self-help homes in the community. 

H.R. 4363 will achieve this technical change by striking the word 

‘‘dwelling’’ and replacing it with ‘‘dwellings’’ in paragraph (1) of section 11(b) of the Housing Opportunity Program Extension Act of 

1996 (42 U.S.C. 12805 note). In addition, the legislation re-designates subsection (h) of section 502 of the National Housing Act 

of 1949 (42 U.S.C. 1472(h)) as the ‘‘Doug Bereuter Section 502 Single Family Housing Loan Guarantee Act.’’

Legislative History 

H.R. 4363 was introduced by Mr. Green of Wisconsin on May 13, 

2004, and referred to the Committee on Financial Services. The 

Committee on Financial Services met in open session on June 3, 

2004, and ordered H.R. 4363 reported to the House with a favorable recommendation, with an amendment, by a voice vote. On 

June 16, 2004, the Committee reported the bill to the House, with 

an amendment (H. Rept. 108–546). On June 21, 2004, the House 

considered the measure under suspension of the rules and passed 

the bill, with an amendment, by a record vote of 368 yeas and no 

nays. 

H.R. 4363 was received in the Senate on June 22, 2004, read 

twice, and referred to the Senate Committee on Banking, Housing, 

and Urban Affairs. On July 14, 2004, the Senate Committee on 

Banking, Housing, and Urban Affairs was discharged from the further consideration of the bill and the Senate passed H.R. 4363 by 

unanimous consent, clearing the measure for the White House. 

H.R. 4363 was presented to the President on June 22, 2004, and 

signed into law on August 2, 2004, becoming Public Law 108–285. 

PRESERVING THE ABILITY OF THE FHA TO INSURE MORTGAGES UNDER

SECTIONS 238 AND 519 OF THE NHA

Public Law 108–301 (S. 2712) 

To preserve the ability of the Federal Housing Administration to 

insure mortgages under sections 238 and 519 of the National Housing Act. 

Summary 

S. 2712 raises the limits on FHA insurance by an additional $4 

billion for the General Insurance/Special Risk Insurance Fund for 

FY 2004, allowing the programs in that fund to continue to operate 

111

throughout the fiscal year. The increase in commitment authority 

will support vital single family insurance programs for reverse 

mortgages for the elderly, rehabilitation loans and condominiums, 

plus all of FHA’s multifamily programs providing mortgage insurance for affordable rental housing. 

Legislative History 

The bill was introduced in the Senate on July 21, 2004, by Senator Reed, read twice, and referred to the Senate Committee on 

Banking, Housing, and Urban Affairs. On July 22, 2004, the Senate Committee on Banking, Housing, and Urban Affairs was discharged from the further consideration of the bill and the Senate 

passed S. 2712 by unanimous consent. 

Also on July 22, 2004, the House passed the bill by unanimous 

consent, clearing S. 2712 for the White House. The bill was presented to the President on July 28, 2004, and signed into law on 

August 9, 2004, becoming Public Law 108–301. 

HOMEOWNERSHIP OPPORTUNITIES FOR NATIVE AMERICANS ACT OF

2004

Public Law 108–393 (H.R. 4471) 

To clarify the loan guarantee authority under title VI of the Native American Housing Assistance and Self-Determination Act of 

1996. 

Summary 

H.R. 4471, the Homeownership Opportunities for Native Americans Act of 2004, amends the Native American Housing Assistance 

and Self-Determination Act of 1996 (NAHASDA) to require Federal 

guarantees for tribal housing activities to guarantee repayment of 

95 percent of the unpaid principal and interest due on the notes 

or other obligations. 

Under title VI of NAHASDA (25 U.S.C. 4191 et seq.), HUD guarantees, with tribal approval, obligations issued by tribes or triballydesignated housing entities (TDHEs) to finance eligible affordable 

housing activities and community development activities related to 

affordable housing. The program requires issuers to pledge current 

and future Indian Housing Block Grant (IHBG) appropriations to 

the repayment of the guaranteed obligations. During the previous 

Administration, the Title VI program was operated at a 95 percent 

loan guarantee level. In fact, several loans are currently pending 

based on the 95 percent loan guarantee level. However, OMB asserts, by authority of OMB Circular A–129, that loan guarantees 

cannot exceed 80 percent in all cases where there is not explicit 

statutory authority to exceed that level. The statute for the Title 

VI program is silent regarding the loan guarantee level. H.R. 4471 

amends NAHASDA to provide explicit statutory authority for the 

Title VI program to continue to operate at a 95 percent loan guarantee level. 

Legislative History 

H.R. 4471 was introduced by Mr. Renzi on June 1, 2004, and referred to the Committee on Financial Services. The Committee on 

112

Financial Services met in open session on June 3, 2004, and ordered H.R. 4471 favorably reported to the House, by a voice vote. 

The bill was reported to the House on June 17, 2004 (H. Rept. 108– 550). 

On June 21, 2004, the House considered the bill under suspension of the rules and passed the bill by a voice vote. On June 22, 

2004, the bill was received in the Senate, read twice, and referred 

to the Senate Committee on Indian Affairs with instructions that 

when the Committee reports, the bill be referred to the Committee 

on Banking, Housing, and Urban Affairs. On October 11, 2004, the 

Committee on Indian Affairs was discharged from the further consideration of the bill and the Senate passed H.R. 4471 without 

amendment by unanimous consent, clearing the bill for the White 

House. 

On October 19, 2004, the bill was presented to the President and 

signed into law on October 30, 2004, becoming Public Law 108– 393. 

RECOGNIZING NATIONAL HOMEOWNERSHIP MONTH AND THE IMPORTANCE OF HOMEOWNERSHIP IN THE UNITED STATES

(H. Res. 658) 

Recognizing National Homeownership Month and the importance 

of homeownership in the United States. 

Summary 

H. Res. 658 declares that the House: (1) supports the goals and 

ideals of National Homeownership Month (June 2004); and (2) recognizes the importance of homeownership in building strong communities and families in the United States. 

Legislative History 

H. Res. 658 was introduced by Mr. Gary G. Miller of California 

on June 1, 2004, and referred to the Committee on Financial Services. On June 22, 2004, the House considered the measure under 

suspension of the rules and the resolution was agreed to by a 

record vote of 415 yeas and 2 nays.

ZERO DOWNPAYMENT ACT OF 2004

(H.R. 3755) 

To authorize the Secretary of Housing and Urban Development 

to insure zero-downpayment mortgages for one-unit residences. 

Summary 

H.R. 3755 amends the National Housing Act to authorize the 

Secretary of Housing and Urban Development to insure zero-downpayment mortgages for one-family residences. The Federal government would insure ‘‘no downpayment’’ home loans for first-time, 

credit-worthy buyers who lack the upfront cash. During consideration, the Committee added several provisions to protect both 

homebuyers and the Government from foreclosures. These safeguards included the following: a requirement establishing extensive 

counseling provisions, including pre-application loan counseling; an 

113

option, exercised by the new homeowner, for foreclosure prevention 

counseling; and, full disclosure of the incremental costs of the loan. 

In addition, the Committee included language that requires HUD 

to use an automated underwriting system to evaluate potential 

homebuyers; to establish a process to monitor lenders to ensure 

that they meet the participation requirements; to allow HUD the 

flexibility to charge a mortgage insurance premium, up to 2.25 percent, paid at the time of origination or mortgage closing, as well 

as to assess an annual premium charge up to .55 percent. The upfront and annual mortgage insurance premiums are designed to offset any potential increased risk. 

In addition to these safeguards, the Committee included a performance trigger mechanism that would temporarily suspend the 

zero downpayment program when the overall claim rate to the 

FHA fund exceeds 3.5 percent. The claim rate is defined as the 

number of claims, or insurance actually paid due to a claim against 

the mortgage insurance premium, during the preceding 12 months 

on FHA single family mortgages. To further ensure that Congress 

and the Administration are apprised of any performance trends 

generated by the new downpayment requirements, HUD would be 

required to provide an annual report on the success of the program. 

Moreover, the Committee imposed a program limitation on the 

number of loans that FHA could insure under the zero downpayment program to no more than 10 percent of the aggregate number 

of mortgages and loans insured by FHA in the preceding fiscal 

year; and finally, the Committee imposed a five-year sunset to provide time for an analysis of the FHA zero downpayment concept. 

Legislative History 

H.R. 3755 was introduced by Mr. Tiberi with nine original cosponsors on February 3, 2004 and referred to the Committee on Financial Services. On February 5, 2004, the bill was referred to the 

Subcommittee on Housing and Community Opportunity. 

On March 24, 2004, the Subcommittee on Housing and Community Opportunity held a legislative hearing on the bill. On May 5, 

2004, the Subcommittee on Housing and Community Opportunity 

met in open session and approved H.R. 3755 for full Committee 

consideration, as amended, by a voice vote. 

On June 3, 2004, the Committee on Financial Services met in 

open session and ordered H.R. 3755 favorably reported to the 

House, with an amendment, by a voice vote. The bill was reported 

to the House, with an amendment, on October 6, 2004 (H. Rept. 

108–748). 

No further action was taken on this measure in the 108th Congress. 

SMALL PUBLIC HOUSING AUTHORITY ACT

(H.R. 27) 

To amend the United States Housing Act of 1937 to exempt 

small public housing agencies (PHAs) from the requirement of preparing an annual public housing agency plan. 

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Summary 

The Public Housing Reform Act requires PHAs to submit both a 

five-year plan and an annual plan to HUD. The five-year PHA plan 

addresses the agency’s mission and its plan to achieve its mission. 

The annual plan requires PHAs to provide details about any updates or changes to the five-year plan. H.R. 27 amends the United 

States Housing Act of 1937 to exempt a small public housing agency from the requirement to prepare an annual public agency plan 

if the agency: (1) administers no more than a total of 100 dwelling 

units and section 8 vouchers; (2) is not a troubled agency; and (3) 

provides assurances of public housing resident participation. 

Legislative History 

H.R. 27 was introduced by Mr. Bereuter on January 7, 2003, and 

referred to the Committee on Financial Services. It was referred to 

the Subcommittee on Housing and Community Opportunity on 

February 27, 2003. 

On March 17, 2004, the Subcommittee on Housing and Community Opportunity was discharged from the further consideration of 

the bill, and the full Committee on Financial Services met in open 

session the same day and ordered H.R. 27 favorably reported to the 

House, with an amendment, by a voice vote. On April 2, 2004, the 

Committee reported the bill to the House (H. Rept. 108–458). 

On May 5, 2004, the House considered the measure under suspension of the rules and passed the bill, with an amendment, by 

a voice vote. 

H.R. 27 was received in the Senate on May 6, 2004. It was read 

twice and referred to the Committee on Banking, Housing, and 

Urban Affairs. 

No further action was taken on this measure in the 108th Congress. 

SAMARITAN INITIATIVE ACT OF 2004

(H.R. 4057) 

To establish a grant program administered under an agreement 

among the Secretaries of Housing and Urban Development, Health 

and Human Services, and Veterans Affairs, in consultation with 

the U.S. Interagency Council on Homelessness, to address the goal 

of ending chronic homelessness through coordinated provision of 

housing, health care, mental health and substance abuse treatment, supportive and other services, including assistance in accessing non-homeless specific benefits and services, and for other purposes. 

Summary 

H.R. 4057, the Samaritan Initiative Act of 2004, amends the 

McKinney-Vento Homeless Assistance Act to establish a program 

through the Department of Housing and Urban Development under 

which a participating Federal agency will make grants to eligible 

entities, including faith-based and community-based organizations, 

for permanent housing (provision of housing or rental assistance) 

and related treatment (including health and drug and alcohol treatment) and support services for the chronically homeless. 

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The bill requires: (1) a participating Federal agency to establish 

an interagency implementation and monitoring team; and (2) a 

grantee to establish a homeless management information system. 

Finally, the bill authorizes appropriations for: (1) HUD; (2) the 

Department of Health and Human Services; and (3) the Department of Veterans Affairs. Finally, the bill authorizes the participation of other Federal agencies. 

Legislative History 

H.R. 4057, the Samaritan Initiative Act of 2004, was introduced 

on March 30, 2004, by Mr. Renzi and 11 original cosponsors and 

referred to the Committee on Financial Services. On April 20, 2004, 

the bill was referred to the Subcommittee on Housing and Community Opportunity. 

On July 13, 2004, the Subcommittee on Housing and Community 

Opportunity held a legislative hearing on the bill. 

No further action was taken on this measure in the 108th Congress. 

OVERSIGHT ACTIVITIES

HUD RESPA REFORM

The Subcommittee on Housing and Community Opportunity held 

a hearing on Tuesday, February 25, 2003, entitled ‘‘Simplifying the 

Home Buying Process: HUD’s Proposal to Reform RESPA.’’ This 

hearing was a follow-up to the full Committee hearing held in the 

107th Congress regarding the Administration’s proposed rule to reform the Real Estate Settlement Procedures Act (RESPA). At the 

hearing, the Subcommittee heard testimony from private sector 

firms and trade associations. 

FAITH-BASED HOUSING PROGRAMS

The Subcommittee on Housing and Community Opportunity held 

a two-day hearing on March 25 and April 28, 2003, entitled 

‘‘Strengthening America’s Communities: Examining the Impact of 

Faith-Based Housing Partnerships’’. The focus of the hearing was 

the potential impact of HUD’s proposed rule that incorporates Executive Order No. 13279 issued on December 12, 2003, into eight 

Community Planning and Development programs. 

Over the two days, the Subcommittee heard testimony from representatives of faith-based groups, academics, and the Department 

of Housing and Urban Development. 

NATIONAL FLOOD INSURANCE PROGRAM

The Subcommittee on Housing and Community Opportunity held 

an oversight hearing on Tuesday, April 1, 2003, entitled ‘‘The National Flood Insurance Program: Review and Reauthorization.’’ The 

National Flood Insurance Program (NFIP) was created as part of 

the National Flood Insurance Act of 1968. 

During its hearing, the Subcommittee heard testimony from 

Members of Congress, representatives from the Department of 

Homeland Security, and groups representing insurers, lenders, and 

State floodplain managers.

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HOPE VI PROGRAM

On April 29, 2003, the Subcommittee on Housing and Community Opportunity held a hearing entitled ‘‘Strengthening and Rejuvenating our Nation’s Communities and the HOPE VI Program.’’ The focus of the hearing was suggested improvements in the HOPE 

VI program. 

The Subcommittee heard testimony from representatives from 

HUD, community groups, public housing authorities, academics, 

lenders, and other interested parties. 

SECTION 8 VOUCHER PROGRAM

The Subcommittee on Housing and Community Opportunity held 

a series of hearings entitled, ‘‘The Section 8 Housing Assistance 

Program: Promoting Decent Affordable Housing for Families and 

Individuals that Rent’’ during the first session of the 108th Congress. In all, the Subcommittee held six days of hearings, three in 

Washington on May 22, June 10, and June 19, 2003; and three 

field hearings, in Los Angeles, California on June 30 and July 1, 

2003 and Columbus, Ohio, on July 29, 2003. 

Over those six days, the Subcommittee heard testimony from 

representatives from HUD, individual tenants and tenant associations, local housing authorities, and property management firms. 

RURAL HOUSING IN AMERICA

On June 19 and July 8, 2003, the Subcommittee on Housing and 

Community Opportunity held two days of hearings entitled ‘‘Rural 

Housing in America.’’ The Financial Services Committee has jurisdiction over the rural housing programs under the Rural Housing 

Service (RHS) in the Department of Agriculture. 

The hearings were designed to begin the process of an extensive 

review of the various rural housing programs under the RHS to determine what changes, if any, were necessary to make the programs more efficient, cost effective and better able to meet the 

needs of low and moderate families in rural areas. 

The Subcommittee heard testimony from the Department of Agriculture, its Inspector General, the General Accounting Office, a variety of rural housing groups, lenders, and other interested parties. 

SUBPRIME LENDING

The Subcommittees on Housing and Community Opportunity 

and Financial Institutions and Consumer Credit held three joint 

hearings on issues related to the topic of predatory lending. 

On November 5, 2003, the Subcommittees on Financial Institutions and Consumer Credit and Housing and Community Opportunity held a joint hearing entitled ‘‘Protecting Homeowners: Preventing Abusive Lending While Preserving Access to Credit’’ on the 

subprime mortgage lending industry in the United States. The 

hearing focused on ways to eliminate abusive practices in the mortgage origination process and in the secondary mortgage market 

while preserving and promoting access to affordable credit for consumers. Witnesses testifying at the hearing included a State attorney general and representatives of various industry and consumer 

groups. 

117

On March 30, 2004, the Subcommittee on Housing and Community Opportunity and the Subcommittee on Financial Institutions 

and Consumer Credit held a hearing entitled ‘‘Subprime Lending: 

Defining the Market and its Consumers’’ to examine the growing 

subprime mortgage lending industry in the United States, with a 

particular focus on the dynamics of this market and its ability to 

offer more customized mortgage products to meet customers’ varying credit needs. In addition, the hearing focused on defining a typical subprime customer, and on the advantages and disadvantages 

that the subprime market poses to the financial security of these 

customers. Witnesses testifying at this hearing included leading experts in the field, as well as representatives from various consumer 

and industry groups. 

On June 23, 2004, the Subcommittees on Housing and Community Opportunity and Financial Institutions and Consumer Credit 

held a joint hearing entitled ‘‘Promoting Homeownership by Ensuring Liquidity in the Subprime Mortgage Market’’ to explore the role 

that the secondary mortgage market plays in providing liquidity to 

the subprime lending industry and creating homeownership opportunities for American consumers. Much of the testimony centered 

on the appropriate standard for assigning liability to secondary 

market participants. Witnesses testifying at this hearing included 

a representative of a State attorney general’s office, various industry groups, a consumer group, and an expert in the field. 

NATIVE AMERICAN HOUSING ISSUES

The Subcommittee on Housing and Community Opportunity held 

a field hearing in Tuba City, Arizona on May 3, 2004, entitled, ‘‘Improving Housing Opportunities for Native Americans.’’ The hearing 

dealt with many of the chronic housing affordability problems Native Americans are experiencing today. 

Witnesses included representatives from the U.S. Department of 

Housing and Urban Development, U.S. Department of Agriculture’s

Office of Rural Development, tribal representatives, and members 

of the lending community active in Native American housing 

issues. 

FINANCIAL LITERACY AND COUNSELING

In an effort to further understand the importance of housing 

counseling to the home buying public, the Subcommittee on Housing and Community Opportunity held a hearing entitled ‘‘Successful Homeownership and Renting through Housing Counseling’’ on 

March 18, 2004. The focus of the hearing was on the importance 

of housing counseling and specifically on H.R. 3938, Expanding 

Housing Opportunities through Education and Counseling. 

The Subcommittee heard testimony from representatives of 

HUD, housing authorities, community groups, and other interested 

parties. 

MORTGAGE FRAUD AND ITS IMPACT ON FINANCIAL INSTITUTIONS

On October 7, 2004, the Subcommittee on Housing and Community Opportunity held a hearing entitled, ‘‘Mortgage Fraud and its 

Impact on Mortgage Lenders.’’ The focus of the hearing was on 

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mortgage fraud and its impact on the lender and ultimately the 

market and was held in the aftermath of ‘‘Operation Continued Action,’’ an operation by the Federal Bureau of Investigation (FBI) 

against 205 individuals in the largest nationwide operation in FBI 

history directed at organized groups and individuals engaged in 

mortgage fraud. 

The Subcommittee heard testimony from HUD and its Inspector 

General, representatives from the FBI, and other interested parties. 

LOW-INCOME HOUSING PRESERVATION

On July 20, 2004, the Subcommittee on Housing and Community 

Opportunity held a hearing on a GAO report entitled ‘‘Multifamily 

Housing: More Accessible HUD Data Could Help Efforts to Preserve Housing for Low-Income Tenants.’’

The Subcommittee heard testimony from representatives of the 

GAO, HUD, tenant and community groups, and other interested 

parties. 

HEARINGS HELD

RESPA Reform. Hearing entitled ‘‘Simplifying the Home Buying 

Process: HUD’s Proposal to Reform RESPA.’’ February 25, 2003. 

PRINTED, serial no. 108–3. 

Faith-Based Initiatives. Hearings entitled ‘‘Strengthening America’s Communities: Examining the Impact of Faith-Based Housing 

Partnerships.’’ March 25 and April 28, 2003. PRINTED, serial no. 

108–14. 

National Flood Insurance. Hearing entitled ‘‘The National Flood 

Insurance Program: Review and Reauthorization.’’ April 1, 2003. 

PRINTED, serial no. 108–17. 

Down-Payment Assistance. Hearing entitled ‘‘Promoting the 

American Dream of Homeownership through Down-Payment Assistance.’’ April 8, 2003. PRINTED, serial no. 108–21. 

HOPE VI Program. Hearing entitled ‘‘Strengthening and Rejuvenating Our Nation’s Communities and the HOPE VI Program.’’

April 29, 2003. PRINTED, serial no. 108–23. 

Section 8 Housing Assistance Program. Hearing entitled ‘‘The 

Section 8 Housing Assistance Program: Promoting Decent Affordable Housing for Families and Individuals Who Rent.’’ May 22, 

June 10 and 17, and July 1, 2003. PRINTED, serial no. 108–31. 

Rural Housing Service. Hearings entitled ‘‘Rural Housing in 

America.’’ June 19 and July 8, 2003. PRINTED, serial no. 108–41. 

Community Development Block Grants. Field hearing entitled 

‘‘Community Development Block Grants: The Impact of CDBG on 

our Communities.’’ June 30, 2003. PRINTED, serial no. 108–46. 

H.R. 1985, the FHA Multifamily Loan Limit Adjustment Act of 

2003. Hearing on H.R. 1985, the FHA Multifamily Loan Limit Adjustment Act of 2003. July 22, 2003. PRINTED, serial no. 108–49. 

Ohio Housing and Community Development Issues. Field hearing 

entitled ‘‘Housing and Community Development Policies in the 

State of Ohio.’’ July 29, 2003. PRINTED, serial no. 108–50. 

Abusive Lending Practices. Joint hearing with the Subcommittee 

on Financial Institutions and Consumer Credit entitled ‘‘Protecting 

119

Homeowners: Preventing Abusive Lending While Preserving Access 

to Credit.’’ November 5, 2003. PRINTED, serial no. 108–62. 

Housing Counseling. Hearing entitled ‘‘Successful Homeownership and Renting through Housing Counseling.’’ March 18, 2004. 

PRINTED, serial no. 108–73. 

H.R. 3755, the Zero Downpayment Act. Hearing on H.R. 3755, the 

Zero Downpayment Act. March 24, 2004. PRINTED, serial no. 108– 74. 

Subprime Lending. Hearing entitled ‘‘Subprime Lending: Defining the Market and its Customers.’’ March 30, 2004. PRINTED, serial no. 108–76. 

Housing Opportunities for Native Americans. Field hearing entitled ‘‘Improving Housing Opportunities for Native Americans.’’ May 

3, 2004. Serial no. 108–83. 

H.R. 4110, the FHA Single Family Loan Limit Adjustment Act of 

2004. Hearing on H.R. 4110, the FHA Single Family Loan Limit 

Adjustment Act of 2004. June 16, 2004. Serial no. 108–93. 

Liquidity in the Subprime Mortgage Market. Joint hearing with 

the Subcommittee on Financial Institutions and Consumer Credit 

entitled ‘‘Promoting Homeownership by Ensuring Liquidity in the 

Subprime Mortgage Market.’’ June 23, 2004. PRINTED, serial no. 

108–97. 

H.R. 4057, the Samaritan Initiative Act of 2004. Hearing on H.R. 

4057, the Samaritan Initiative Act of 2004. July 13, 2004. Serial 

no. 108–99. 

GAO Report on Multifamily Housing. Hearing on a GAO Report 

entitled ‘‘Multifamily Housing: More Accessible HUD Data Could 

Help Efforts to Preserve Housing for Low Income Tenants.’’ July 

20, 2004. Serial no. 108–102. 

Mortgage Fraud. Hearing entitled ‘‘Mortgage Fraud and Its Impact on Mortgage Lenders.’’ October 7, 2004. Serial no. 108–116.

(121)

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

(Ratio: 11–9)

SUE W. KELLY, New York, Chair 

RON PAUL, Texas 

Vice Chairman 

STEVEN C. LATOURETTE, Ohio 

MARK GREEN, Wisconsin 

JOHN B. SHADEGG, Arizona 

VITO FOSSELLA, New York 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

TIM MURPHY, Pennsylvania 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

MICHAEL G. OXLEY, Ohio 

ex officio 

LUIS V. GUTIERREZ, Illinois 

JAY INSLEE, Washington 

DENNIS MOORE, Kansas 

JOSEPH CROWLEY, New York 

CAROLYN B. MALONEY, New York 

JIM MATHESON, Utah 

STEPHEN F. LYNCH, Massachusetts 

ARTUR DAVIS, Alabama 2

CHRIS BELL, Texas 1

BARNEY FRANK, Massachusetts 

ex officio

OVERSIGHT ACTIVITIES

STOPPING TERRORIST FINANCING

On March 11, 2003, the Subcommittee on Oversight and Investigations held a hearing entitled ‘‘Progress Since 9/11: The Effectiveness of the U.S. Anti-Terrorist Financing Efforts’’ and on September 24, 2003, the Subcommittee also held a hearing entitled 

‘‘The Hamas Asset Freeze and Other Government Efforts to Stop 

Terrorist Financing.’’ Senior officials from the Treasury, State, Justice, and Homeland Security Departments who engage in international negotiations and enforcement actions to halt the flow of 

terrorist funds testified at the hearings. 

IMPACTS OF THE PRESIDENT’S TAX PLAN ON INVESTORS, CAPITAL

MARKETS, AND CORPORATE GOVERNANCE

The Subcommittee held a hearing on March 18, 2003,n entitled ‘‘Paying Dividends: How the President’s Tax Plan Will Benefit Individual Investors and Strengthen the Capital Markets.’’ The purpose 

of the hearing was to discuss the impacts of the proposal by the 

President to eliminate the double taxation of corporate dividends. 

Witnesses included the Treasury Under Secretary for Domestic Finance, former Members of Congress, representatives from the business community, and experts on the impacts of tax cuts on economic growth and on housing construction. 

FIGHTING FRAUD AND IDENTITY THEFT THROUGH IMPROVING

INFORMATION SECURITY

On April 3, 2003, the Subcommittees on Oversight and Investigations and Financial Institutions and Consumer Credit held a joint 

hearing entitled ‘‘Fighting Fraud: Improving Information Security’’

to examine three specific cases in which breaches of data security 

or failures of internal controls resulted in the inadvertent discloVerDate jul 14 2003 02:56 Jan 11, 2005 Jkt 039006 PO 00000 Frm 00127 Fmt 6601 Sfmt 6602 E:\HR\OC\HR802.XXX HR802
122

sure of consumers’ personal financial information. The hearing focused on strategies for coordinating the efforts of credit issuers, 

third-party vendors that process transactions, credit bureaus, and 

law enforcement agencies in limiting harm to consumers when data 

security is breached. Witnesses testifying at the hearing included 

representatives of the Federal Bureau of Investigation, the U.S. Secret Service, and the Federal Trade Commission, as well as industry and consumer groups. 

INCREASING THE EFFECTIVENESS OF STATE CONSUMER PROTECTIONS

The Subcommittee held a hearing on May 6, 2003, entitled ‘‘Increasing the Effectiveness of State Consumer Protections.’’ The 

hearing focused on the need to improve the effectiveness of State 

insurance market conduct oversight. Witnesses included State insurance regulators, an expert on State insurance regulation from 

the General Accounting Office, and representatives from consumer 

organizations. 

SAVING TAXPAYER MONEY THROUGH SOUND FINANCIAL MANAGEMENT

On June 25, 2003, the Subcommittee held a hearing entitled 

‘‘Saving Taxpayer Money through Sound Financial Management.’’

The focus of the hearing was to review how Federal agencies can 

better manage their appropriated funds to reduce waste and abuse. 

The Conference Report accompanying the budget resolution for 

FY2004 (H. Rept. 108–71) required House authorizing committees 

to identify means of eliminating waste, fraud, and abuse. Committee staff, senior officials from HUD and the Rural Housing 

Service; the Inspectors General of HUD and the Agriculture Department; and the GAO collaborated to determine the amount of 

unliquidated obligations that could meet the goals in the budget 

resolution. The Chief Financial Office of HUD and the Under Secretary for Rural Development at the Agriculture Department were 

the witnesses. As a result of the hearing, the Committee considered 

and approved a report to the Committee on the Budget entitled, 

‘‘Changes in Law to Prevent Waste, Fraud, and Abuse,’’ on July 24, 

2003.

GOVERNMENT AND INDUSTRY EFFORTS TO PROTECT OUR MONEY DURING BLACKOUTS, HURRICANES, AND OTHER DISASTERS

The Subcommittee held a hearing on October 20, 2003, entitled 

‘‘Government and Industry Efforts to Protect our Money During 

Blackouts, Hurricanes, and Other Disasters.’’ The hearing focused 

on the steps taken by Government officials and the private sector 

to recover from the Northeast blackout in August 2003 and from 

Hurricane Isabel, and on planning to prevent disruptions in financial services as a result of disasters. Witnesses included the Assistant Secretary of the Treasury for Financial Institutions, a Member 

of the Board of Governors of the Federal Reserve System, the 

former Chair of the President’s Critical Infrastructure Protection 

Board, and the key officials from the private sector involved in disaster recovery efforts. The SEC and Superintendent of the New 

York State Banking Department submitted statements for the 

record. 

123

CONGRESSIONAL REVIEW OF OCC PREEMPTION

On January 28, 2004, the Subcommittee on Oversight and Investigations held a hearing entitled ‘‘Congressional Review of OCC 

Preemption.’’ The purpose of the hearing was to examine regulations issued by the Office of the Comptroller of the Currency (OCC) 

governing the extent to which State laws apply to the activities of 

banks chartered by the Federal government. Witnesses at the hearing included representatives from the OCC, the National Association of Attorneys General, the Conference of State Bank Supervisors, and industry and consumer groups. 

OVERSIGHT OF THE FEDERAL DEPOSIT INSURANCE CORPORATION

On March 4, 2004, the Subcommittee on Oversight and Investigations held a hearing entitled ‘‘Oversight of the Federal Deposit 

Insurance Corporation’’ to examine the operations of the Federal 

Deposit Insurance Corporation (FDIC), the Federal agency which 

insures deposits at the Nation’s banks and thrift institutions, as 

well as regulates some 5,000 State-chartered institutions. Witnesses at the hearing included representatives of the FDIC, the 

FDIC Office of Inspector General, and the United States General 

Accounting Office. 

SADDAM HUSSEIN’S MONEY LAUNDERING ACTIVITIES

On May 14, 2003, the Subcommittee held a hearing entitled ‘‘Divesting Saddam: Freezing, Seizing, and Repatriating Saddam’s 

Money to the Iraqis’’, the first Congressional hearing on the subject. Witnesses from the Treasury, State, and Defense Departments 

who are leading teams of agents inside Iraq and around the world 

testified at the hearing. 

The Subcommittee on Oversight and Investigations held a hearing on March 18, 2004, entitled ‘‘The Hunt for Saddam’s Money: 

U.S. and Foreign Efforts to Recover Iraq’s Stolen Money’’ to update 

Members on the status of U.S. efforts to seize and repatriate Iraqi 

national assets stolen by the Saddam regime and determine international obstacles facing the U.S. in this endeavor. Officials from 

Treasury and State discussed current successes and ongoing international efforts and actions to find and freeze both known and hidden Iraqi assets. 

IMPROVING FINANCIAL OVERSIGHT: A PRIVATE SECTOR VIEW OF ANTIMONEY LAUNDERING EFFORTS

The Subcommittee on Oversight and Investigations held a hearing entitled ‘‘Improving Financial Oversight: A Private Sector View 

of Anti-Money Laundering Efforts’’ on Tuesday, May 18, 2004. The 

hearing highlighted enhanced financial oversight by agencies of the 

Federal government, cooperation from overseas counterparts and 

the institutional commitment to compliance at home and abroad. 

Witnesses included representatives from financial services firms 

and a terrorist research firm. 

124

RISK MANAGEMENT AND REGULATORY FAILURES AT RIGGS BANK AND

UBS

The Subcommittee on Oversight and Investigations held a hearing entitled ‘‘Risk Management and Regulatory Failures at Riggs 

Bank and UBS: Lessons Learned’’ on Wednesday, June 2, 2004. 

The purpose of the hearing was to address concerns over perceived 

lapses in enforcement and regulatory oversight of anti-money laundering provisions of the Bank Secrecy Act and the USA/Patriot Act. 

The Subcommittee heard testimony from representatives of the 

Federal Reserve Board of Governors and the Office of the Comptroller of the Currency. 

OVERSIGHT OF THE DEPARTMENT OF THE TREASURY

The Subcommittee on Oversight and Investigations held a hearing entitled ‘‘Oversight of the Department of the Treasury’’ on 

Wednesday, June 16, 2004. The hearing reviewed a number of 

issues regarding the operations of the Treasury Department, including (1) how Treasury was operating at the current level of resource support; (2) Treasury’s position on reform of the Government Sponsored Entities; (3) the Office of the Comptroller of the 

Currency’s recent regulations on preemption of State laws; (4) the 

status of the Department’s efforts to improve the financial literacy 

of Americans; (5) its observations and conclusions about the recent 

problems at Riggs Bank dealing with embassy accounts; and (6) its 

reaction to the recent UBS ‘‘ECI’’ accounts matter. In addition, the 

Subcommittee focused on financial sector compliance with the requirements of Title III of the USA PATRIOT Act dealing with 

money laundering and terrorist financing. 

The Subcommittee heard testimony from the Deputy Secretary of 

the Treasury, the Director of the Financial Crimes Enforcement 

Network, the Director of the Office of Foreign Assets Control, the 

Chief of Criminal Investigation at the Internal Revenue Service, 

and the Treasury Department’s Inspector General. 

DIVERSITY IN THE FINANCIAL SERVICES INDUSTRY AND ACCESS TO

CAPITAL FOR MINORITY-OWNED BUSINESSES: CHALLENGES AND OPPORTUNITIES

On Thursday, July 15, 2004, the Subcommittee on Oversight and 

Investigations held a hearing entitled ‘‘Diversity in the Financial 

Services Industry and Access to Capital for Minority-Owned Businesses: Challenges and Opportunities’’ to discuss diversity and minority-owned businesses’ access to capital in the financial services 

sector. The hearing delved into issues such as the extent to which 

minorities are participating in all facets of entrepreneurial activity 

in the United States, including in leadership and executive roles on 

corporate boards, in the financial services industry, and in the accounting profession. Witnesses discussed the opportunities and 

challenges corporations face in diversifying their corporate structures at both middle and senior levels of management. In addition, 

the hearing delved into the challenges that minority-owned businesses continue to face in their efforts to raise capital to expand 

their businesses. 

125

Witnesses included representatives of the New America Alliance, 

the Securities Industry Association, Women in Housing and Finance, Inc., the Illinois Office of Banks and Real Estate, Boston 

College, and Korn/Ferry International. 

ENCOURAGING SMALL BUSINESS GROWTH AND ACCESS TO CAPITAL

On Thursday, September 23, 2004, the Subcommittee on Oversight and Investigations held a hearing entitled ‘‘Encouraging 

Small Business Growth and Access to Capital’’. The focus of the 

hearing was primarily on the impact of the administration of Federal securities laws on small business capital formation. The Subcommittee explored what measures can or should be taken to facilitate greater growth and access to the capital markets by small 

business. 

The Subcommittee heard testimony from representatives from 

the SEC and the financial services and venture capital industries. 

COMBATING INTERNATIONAL TERRORIST FINANCING

The Subcommittees on Domestic and International Monetary Policy, Trade, and Technology and on Oversight and Investigations 

held a joint hearing on Thursday, September 30, 2004, on the status of efforts to combat international terrorist financing. The Assistant Secretary of the Treasury for Terrorist Financing and the 

Assistant Secretary of State for Economic and Business Affairs appeared as witnesses. 

The United States Departments of Treasury and State, in cooperation with other government agencies, have successfully solicited the support of the international community to help combat 

money laundering and terrorist financing. Witnesses highlighted 

the successful promotion of international standards for financial 

transparency and accountability; coordinated technical assistance 

to weak but willing states; ongoing freezing of terrorist-related and 

other criminal assets; continued coordination of intelligence operations; and using diplomacy to convince other governments to take 

significant steps. 

OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT AND FEDERAL

HOUSING FINANCE BOARD

On July 13, 2004 the Subcommittees on Oversight and Investigations and Capital Markets, Insurance, and Government Sponsored 

Enterprises held a joint hearing entitled ‘‘A Review of the Office of 

Federal Housing Enterprise Oversight and Federal Housing Finance Board.’’ The Subcommittees examined the operations of the 

Office of Federal Housing Enterprise Oversight and the Federal 

Housing Finance Board. The Director of OFHEO and the Chairman 

of the Federal Housing Finance Board testified at this hearing. 

TERRORISM RISK INSURANCE

On April 2, 2004, the Subcommittees on Oversight and Investigations and Capital Markets, Insurance, and Government Sponsored 

Enterprises held a joint hearing entitled ‘‘A Review of TRIA and Its 

Effect on the Economy: Helping America Move Forward.’’ The purpose of the hearing was to conduct a review of the progress made 

126

by the Treasury Department and the insurance industry in implementing the provisions of the Terrorism Risk Insurance Act of 2002 

(TRIA), as well as changes in the market for terrorism insurance 

coverage under TRIA. The Subcommittee heard testimony from the 

Assistant Secretary of the Treasury for Financial Institutions, the 

New York Superintendent of Insurance, and the Government Accountability Office. 

HEARINGS HELD

U.S. Anti-Terrorist Financing Efforts. Hearing entitled ‘‘Progress 

Since 9/11: The Effectiveness of U.S. Anti-Terrorist Financing Efforts.’’ March 11, 2003. PRINTED, Serial no. 108–10. 

Benefits of the President’s Tax Plan. Hearing entitled ‘‘Paying 

Dividends: How the President’s Tax Plan Will Benefit Individual 

Investors and Strengthen the Capital Markets.’’ March 18, 2003. 

PRINTED, Serial no. 108–12. 

Fighting Fraud: Information Security. Hearing entitled ‘‘Fighting 

Fraud: Improving Information Security.’’ April 3, 2003. PRINTED, 

Serial no. 108–19. 

State Consumer Protections. Hearing entitled ‘‘Increasing the Effectiveness of State Consumer Protections.’’ May 6, 2003. PRINTED, Serial no. 108–25. 

Divesting Saddam. Hearing entitled ‘‘Divesting Saddam: Freezing, Seizing, and Repatriating Saddam’s Money to the Iraqis.’’ May 

14, 2003. PRINTED, Serial no. 108–28. 

Sound Financial Management. Hearing entitled ‘‘Saving Taxpayer Money Through Sound Financial Management.’’ June 25, 

2003. PRINTED, Serial no. 108–44. 

Hamas Asset Freeze. Hearing entitled ‘‘The Hamas Asset Freeze 

and Other Government Efforts to Stop Terrorist Financing.’’ September 24, 2003. PRINTED, Serial no. 108–53. 

Government Efforts to Protect Our Money during Blackouts, Hurricanes, and Other Disasters. Hearing entitled ‘‘Government Efforts 

to Protect Our Money during Blackouts, Hurricanes, and Other 

Disasters.’’ October 20, 2003. PRINTED, Serial no. 108–58. 

Congressional Review of OCC Preemptions. Hearing entitled 

‘‘Congressional Review of OCC Preemptions.’’ January 28, 2004. 

PRINTED, Serial no. 108–65. 

The Hunt for Saddam’s Money. Hearing entitled ‘‘The Hunt for 

Saddam’s Money: U.S. and Foreign Efforts to Recover Iraq’s Stolen 

Money.’’ March 18, 2004. PRINTED, Serial no. 108–72. 

Oversight of the Office of the Comptroller of the Currency. Hearing entitled ‘‘Oversight of the Office of the Comptroller of the Currency: Examination of Policies, Procedures, and Resources.’’ April 1, 

2004. PRINTED, Serial no. 108–78. 

TRIA and Its Effect on the Economy. Joint hearing with the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises entitled ‘‘A Review of TRIA and Its Effect on the 

Economy: Helping America Move Forward.’’ April 28, 2004. PRINTED, Serial no. 108–81. 

Improving Financial Oversight. Hearing entitled ‘‘Improving Financial Oversight: Private Sector View of Anti-Money Laundering 

Efforts.’’ May 18, 2004. PRINTED, Serial no. 108–87. 

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Risk Management and Regulatory Failures at Riggs Bank and 

UBS. Hearing entitled ‘‘Risk Management and Regulatory Failures 

at Riggs Bank and UBS.’’ June 2, 2004. PRINTED, Serial no. 108– 91. 

Oversight of the Department of the Treasury. Hearing entitled ‘‘Oversight of the Department of the Treasury.’’ June 16, 2004. 

PRINTED, Serial no. 108–94. 

Review of OFHEO and Federal Housing Finance Board. Joint 

hearing with the Subcommittee on Capital Markets, Insurance, and 

Government Sponsored Enterprises entitled ‘‘A Review of the Office 

of Federal Housing Enterprise Oversight and Federal Housing Finance Board.’’ July 13, 2004. Serial no. 108–100. 

Diversity in the Financial Services Industry. Hearing entitled ‘‘Diversity in the Financial Services Industry and Access to Capital 

for Minority Owned Businesses: Challenges and Opportunities.’’ July 15, 2004. Serial no. 108–101. 

Small Business Growth and Access to Capital. Hearing entitled ‘‘Encouraging Small Business Growth and Access to Capital.’’ September 23, 2004. Serial no. 108–113. 

Combatting International Terrorist Financing. Joint hearing with 

the Subcommittee on Domestic and International Monetary Policy, 

Trade, and Technology entitled ‘‘Combatting International Terrorist 

Financing.’’ September 30, 2004. Serial no. 108–114.

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OVERSIGHT PLAN FOR THE 108TH CONGRESS 

Clause 2(d) of rule X of the Rules of the House of Representatives for the 108th Congress requires that each standing committee 

in the first session of a congress adopt an oversight plan for the 

two-year period of the Congress and submit the plan to the Committee on Government Reform and the Committee on House Administration. 

Clause 1(d)(1) of rule XI requires each committee to submit to 

the House not later than January 2 of each odd-numbered year, a 

report on the activities of that committee under rules X and XI 

during the Congress ending on January 3 of such year. Clause 

1(d)(3) of rule XI also requires that the report include a summary 

of the oversight plans submitted pursuant to clause 2(d) of rule X; 

a summary of the actions taken and recommendations made with 

respect to each such plan; and a summary of any additional oversight activities undertaken by the committee and any recommendations made or actions taken thereon. 

Part A of this section contains the Oversight Plan of the Committee on Financial Services for the One Hundred Eighth Congress, 

which the Committee considered and adopted on February 5, 2003. 

Part B of this section contains a summary of the actions taken 

to implement that plan and the recommendations made with respect to the plan. Additional oversight activities undertaken by the 

Committee, and the recommendations made or actions taken thereon, are contained in the specific sections relating to the activities 

of the full Committee and each of the subcommittees.

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PART A 

OVERSIGHT PLAN OF THE COMMITTEE ON FINANCIAL 

SERVICES FOR THE ONE HUNDRED EIGHTH CONGRESS 

February 5, 2003.—Approved by the Committee on Financial 

Services, as amended. 

Clause 2(d)(1) of rule X of the Rules of the House of Representatives for the 108th Congress requires each standing committee, not 

later than February 15 of the first session to adopt an oversight 

plan for the 108th Congress. The oversight plan must be submitted 

simultaneously to the Committee on Government Reform and the 

Committee on House Administration. 

The following agenda constitutes the oversight plan of the Committee on Financial Services for the 108th Congress. It includes 

areas in which the Committee and its subcommittees expect to conduct oversight during this Congress, but does not preclude oversight or investigation of additional matters or programs as they 

arise. The Committee will consult, as appropriate, with other committees of the House that may share jurisdiction on any of the subjects listed below. 

INTERNATIONAL FINANCIAL ISSUES

Annual report and testimony by the Secretary of the Treasury on 

International Monetary Fund Reform and the State of the International Financial System. The Committee will review and assess 

the annual reports to Congress from the Secretary of the Treasury 

on the International Monetary Fund (IMF) and the state of the 

international financial system. Pursuant to section 613 of Public 

Law 105–277, the Committee will hear annual testimony from the 

Secretary of the Treasury on: (1) progress made in reforming the 

IMF; (2) the status of efforts to reform the international financial 

system; (3) compliance by borrower countries with the terms and 

conditions of IMF assistance; and (4) proposals to change the international sovereign bankruptcy system. 

Basel Capital Accord. The Committee will continue to review proposals for a new Basel Capital Accord, which is an agreement by 

the G–10 central banks to establish common minimum capital 

standards for their banking industries. The members of the Basel 

Committee have been negotiating changes to the Basel Accord and 

are set to release their third and final consultative paper in March 

of 2003. The Committee will examine the need for the recommended changes to the current Basel Accord and address concerns related to the proposed capital charges for operational and 

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credit risk. The Committee will address whether the proposed new 

capital charges will have a discriminatory effect on U.S. financial 

institutions and whether there are any other potential unintended 

consequences stemming from the proposed Accord. 

Export-Import Bank of the United States. In the 107th Congress 

the Committee extended and revised the charter of the Export-Import Bank of the United States (Ex-Im) through the enactment of 

the Export-Import Bank Reauthorization Act of 2002 (Public Law 

107–189). This legislation made significant changes to the operation of the ‘‘Tied Aid’’ program and strongly encouraged the Bank 

to increase its transactions with small businesses. Additionally, the 

Committee approved changes to the way the Bank evaluates and 

approves transactions that are subject to an anti-dumping or countervailing duty order. The Committee will oversee the implementation of these new mandates on the Bank and will examine the competitiveness of the Bank as compared to foreign export credit agencies. In order to assess their effect on Ex-Im competitiveness, the 

Committee will review any cases where the President invokes his 

Executive power to block Ex-Im financing due to foreign policy considerations. 

U.S. Contributions to the International Financial Institutions.

The Committee will review U.S. participation in, and the effectiveness of U.S. policy toward, the International Monetary Fund, the 

World Bank Group, and the regional multilateral development 

banks (MDBs). Special attention will be given to the continuing instability in Latin America, with particular emphasis on Argentina, 

Brazil, Venezuela, Colombia, and Haiti; on MDB involvement in 

the reconstruction of Afghanistan; on the implications for the International Financial Institutions of a war with Iraq; on proposals to 

change the international sovereign bankruptcy system; on efforts to 

improve the transparency of IFIs; on implementation of privatization programs sponsored by the MDBs; and on anti-corruption 

measures within the MDBs. 

North American Development Bank. The Committee will monitor 

and conduct necessary oversight activities over U.S. involvement in 

the North American Development Bank (NADBank). Specifically, 

the Committee will review the joint reform proposal for the 

NADBank as agreed to by President George W. Bush and President 

Vicente Fox of Mexico. 

Trade in Financial Services. With passage of the Trade Promotion Authority Act (Public Law 107–210), the Chairman and 

Ranking Minority Member of the Committee were named to the 

Congressional Oversight Group on Trade. In this capacity the Committee will be active in the oversight of trade negotiations and will 

consult regularly with the U.S. Trade Representative on matters 

within the jurisdiction of the Committee. The Committee will monitor negotiations for increased trade liberalization and consult with 

U.S. counterparts to those negotiations. The Committee will examine the financial services and investment provisions of free trade 

pacts, including the Chile and Singapore Free Trade Agreements. 

International Corporate Governance Issues. The Committee will 

continue to monitor various proposals by the European Union (EU) 

in the area of corporate governance. Those include efforts to adopt 

International Accounting Standards, the proposed EU Directive on 

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Conglomerates and the Financial Services Action Plan (FSAP). The 

FSAP is a far-reaching reform of the EU’s financial services sector, 

and as such will impact American companies, consumers and investors. The Committee is committed to working with U.S. and European regulators to ensure fair access to Europe’s financial markets. 

The Committee will also monitor international implications of the 

recently-enacted Sarbanes-Oxley Act (Public Law 107–204). 

International Debt Relief. The Committee will monitor and conduct necessary oversight activities regarding the implementation of 

legislation passed in the 106th Congress to authorize U.S. funding 

for the Enhanced Heavily Indebted Poor Country (HIPC) Initiative. 

The Committee will assess progress made by the IMF and World 

Bank in granting multilateral debt relief to qualified HIPC countries. The Committee will also monitor the development and adoption of poverty reduction strategies by the HIPC countries, and will 

assess compliance with other conditions on U.S. funding specified 

in the authorizing legislation. In addition, the Committee will assess the $1 billion shortfall in financing for the HIPC Trust Fund, 

as determined by the G–8 leaders at the June 2002 Economic Summit. The Committee will assess the effectiveness of the current 

HIPC initiative, as well as the need for reforms. 

Administration’s Millennium Challenge Account. The President 

announced on March 14, 2002 that the United States will increase 

its core development assistance by 50 percent over the next three 

years, resulting in a $5 billion annual increase over current levels. 

The additional funds will go to a new Millennium Challenge Account (MCA) designed to help developing nations improve their 

economies and standards of living. The Committee will monitor and 

assess the impact of the MCA on the MDBs and debt relief efforts. 

It will also assess efforts by the Secretaries of State and Treasury 

to work with the world community to develop clear, concrete and 

objective criteria for measuring progress in good governance, health 

and educational investment, and employing economic policies that 

foster economic freedom—all essential tenets of the MCA as proposed. 

Global Fund To Fight AIDS, Tuberculosis and Malaria. The 

Committee will monitor and conduct necessary oversight activities 

regarding the implementation of the Global AIDS and Tuberculosis 

Relief Act of 2000 (Public Law 106–264) which authorizes an international trust fund, led by the United States and other donors, to 

address the crisis of AIDS and other infectious diseases through 

support of prevention, education and treatment efforts in sub-Saharan Africa and other hard-hit regions. This legislation laid the 

groundwork for the establishment of the Global Fund to Fight 

AIDS, Tuberculosis and Malaria (Global Fund), which is a publicprivate partnership headquartered in Geneva, Switzerland. The 

World Bank holds an ex-officio (non-voting) seat on the Global 

Fund’s board and serves as the Global Fund’s trustee and banker, 

while the Secretary of Health and Human Services is a voting 

board member. With the United States as the leading contributor 

to the Global Fund, the Committee must oversee its operations to 

ensure that the Global Fund and the World Bank operate effectively and on a timely basis in rendering funds and aid as required 

by the Global AIDS and Tuberculosis Relief Act. The Committee 

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expects to receive testimony from the Secretary of the Treasury 

and other U.S. governmental entities with expertise on the Global 

Fund, such as the General Accounting Office (GAO). In addition, it 

will review the status of the World Bank’s programs to reduce HIV/ 

AIDS, such as the World Bank Multi-Country AIDS Program. 

Coordination of International Financial Services Programs. The 

Committee will review the coordination among various Executive 

branch agencies in promoting financial services trade, including the 

priority and rank of such programs and program officials. 

FINANCIAL SERVICES INDUSTRY/CONSUMER PROTECTION

FINANCIAL INSTITUTIONS

Implementation of USA PATRIOT Act. The Committee will monitor regulatory implementation by the Treasury Department and 

other relevant government agencies of the anti-money laundering 

and terrorist financing provisions of the USA PATRIOT Act (Public 

Law 107–56). 

Money Laundering. The Committee will review enforcement of 

anti-money laundering laws and regulations, including, but not 

limited to, those enacted or implemented as part of the USA PATRIOT Act. This review will include examination of the administration’s annual National Money Laundering Strategy, and consideration of whether to reauthorize the statutory provisions which require submission of the Strategy, which are set to expire in 2003. 

The Committee will also monitor the establishment of the new Department of Homeland Security to ensure that the anti-money 

laundering efforts of its component agencies continue. 

Deposit Insurance Reform. The Committee will continue its review of proposals to reform the Federal deposit insurance system. 

During the 107th Congress, the Committee conducted comprehensive hearings on various aspects of the deposit insurance system, 

culminating in overwhelming House passage of reform legislation 

that was never considered in the Senate. The Committee’s focus in 

this Congress will be on addressing inequities and potential economic distortions that exist in the current system, while ensuring 

that Federal deposit insurance continues to serve its historical 

function as a source of stability in the banking system and a valued safety net for depositors. 

Implementation of Gramm-Leach-Bliley Act. The Committee will 

continue to monitor various aspects of the implementation of the 

Gramm-Leach-Bliley Act (GLB), the landmark financial modernization law enacted in 1999. Included in the Committee’s review will 

be regulatory interpretations of: (1) GLB’s provision authorizing 

the Federal Reserve Board and the Treasury Department to define 

activities that are ‘‘financial in nature,’’ and therefore permissible 

for financial holding companies and financial subsidiaries to engage 

in; and (2) the Title II ‘‘push-out’’ provisions, relating to regulation 

of certain securities activities conducted within banking organizations. The Committee will also review government and private sector implementation of the financial privacy requirements of Title V 

of GLB, which give consumers notice and choice about how their 

financial information is used and disseminated by financial firms. 

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Fair Credit Reporting Act. In conjunction with the January 1, 

2004, expiration of provisions that provide for uniform national 

treatment of certain aspects of the credit reporting process, the 

Committee will conduct a comprehensive review of the Fair Credit 

Reporting Act (FCRA). Among the issues that the Committee expects to consider are whether the uniform Federal standards established by the 1996 amendments to the FCRA have benefited consumers and the national economy, and what the consequences 

would be of allowing the States to set their own standards. The 

Committee will review other FCRA issues such as proposals to address the Federal Trade Commission staff’s opinion letter relating 

to the treatment under the FCRA of employer investigations of employee misconduct (the so-called ‘‘Vail letter’’); the adequacy of efforts by furnishers of credit reporting data and the credit bureaus 

to ensure the accuracy of information that appears in consumer 

credit reports; and the increasing use of credit scores to determine 

consumers’ eligibility for everything from loans to auto insurance 

policies. 

Financial Privacy and Identity Theft. In addition to examining 

privacy in the context of the FCRA and GLB, the Committee will 

conduct a broader review of financial privacy issues to determine 

whether existing government policies and industry practices provide sufficient protections for consumers. With the prevalence of 

identity theft increasing at an alarming rate, the Committee will 

focus particular attention on government and private sector initiatives to prevent identity theft and to assist victims of the crime. 

Internet Gambling. The Committee will continue to monitor the 

use of financial instruments—which include credit cards, checks, 

electronic funds transfers and other alternative forms of payment— in unlawful Internet gambling. The Committee’s review will focus 

on the potential misuse of illegal offshore Internet gambling sites 

to facilitate money laundering, terrorist financing, and other criminal activity, as described by the Department of Justice and the 

Federal Bureau of Investigation in testimony to the Committee last 

Congress. 

Payments System Innovations. The Committee will review government and private sector efforts to achieve greater innovations 

and efficiencies in the payments system, including specific legislative proposals to facilitate greater electronic processing of paper 

checks. 

Credit Unions. The Committee will continue to monitor the National Credit Union Administration’s implementation of the Credit 

Union Membership Access Act of 1998. The Committee will consider other credit union issues in conjunction with its review of legislative proposals to offer depository institutions relief from outdated or unnecessary regulatory burdens. 

Financial Supervision. The Committee will require Federal regulators to provide periodic updates on their safety and soundness supervision of the banking, thrift, and credit union industries to ensure that systemic risks or other structural weaknesses in the financial sector are identified and addressed promptly. Several recent high-profile failures of depository institutions, involving large 

losses to the insurance funds relative to the asset size of the failed 

institutions, have raised questions about the effectiveness of 

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prompt corrective action (PCA) and other supervisory tools for addressing troubled institutions. 

Regulatory Burden Reduction. The Committee will review the 

current regulatory burden on banks, thrifts, and credit unions with 

the goal of reducing unnecessary or duplicative regulations consistent with consumer protection and safe and sound banking practices. The Committee’s starting point will be the work done in the 

prior Congress in preparation for its consideration of the Financial 

Services Regulatory Relief Act of 2002 (H.R. 3951). In evaluating 

proposals to grant regulatory relief to financial institutions, the 

Committee will examine whether cost savings achieved through 

regulatory burden reduction are passed on to consumers. 

Consumer Protections. In addition to issues addressed throughout 

this oversight plan that relate to consumers of financial services, 

the Committee will consider other specific consumer protection 

issues within its jurisdictional purview, including promoting greater financial literacy; ensuring the availability of credit and other financial products and services to low and moderate-income Americans; and examining proposed revisions to various titles of the Consumer Credit Protection Act, including the Truth in Lending Act 

and the Fair Debt Collection Practices Act. 

Credit Card Regulation. The Committee will continue its review 

of credit card industry practices, as they relate to both consumer 

protections and the management of risk by card-issuing banks. The 

Committee’s review will encompass recent regulatory guidance 

issued by the Federal banking agencies governing loss-recognition 

standards and other account management practices employed by 

credit card banks. 

First Accounts/Electronic Transfer Accounts. In addition to monitoring the First Accounts Initiative, the Committee will continue to 

monitor the Treasury Department’s implementation of the Electronic Transfer Account (ETA) program, along with for unbanked 

recipients of social security, veterans’ benefits, and other Federal 

payments. A 2002 General Accounting Office study of this program 

found that the actual number of unbanked recipients of Federal 

payments may be twice the number originally estimated by the Department of the Treasury. The Committee intends to continue to 

seek ways to improve the effectiveness and efficiency of the ETA 

program, including exploring other electronic payment options to 

extend the program’s reach and broaden the availability of low-cost 

financial services to the unbanked. 

INFORMATION SECURITY

Data Protection. The Committee will continue its review of the 

policies and procedures of Federal and State governments and the 

private sector to protect sensitive information about consumers 

from improper disclosure, theft, or loss. The Committee will also review the benefits and costs of current government and private sector initiatives to protect the privacy of information they own regarding consumers. 

Antifraud Network. The Committee will continue to review the 

inadequacies in current government procedures for information 

sharing on regulated financial companies and professionals. The 

Committee will continue its examination of both the need for a 

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more comprehensive anti-fraud network to prevent financial crimes 

as well as better established procedures governing information 

sharing among government and quasi-government entities. 

Cybersecurity. The United States has long been dependent on a 

complex of systems that link critical infrastructures to assure delivery of vital services. Cyberterrorism is an issue of growing national 

interest. Many believe terrorists plan to disrupt the Internet or 

other critical infrastructures such as transportation, communications, or banking and finance. The Committee will examine the financial services industry’s susceptibility to a cyber attack and work 

to ensure the security of the financial services infrastructure. 

Electronic Signatures and E-Commerce. The Committee will continue to monitor the evolution of electronic signature technology 

and laws to ensure that consumers are able to take maximum advantage of new electronic commerce financial products and services 

without undue burdens and with the proper level of security and 

communication protections. 

INSURANCE

Insurance Solvency Regulation. The Committee will continue its 

examination of the National Association of Insurance Commissioners (NAIC) accreditation program that judges the adequacy of 

State insurance financial regulation. The Committee will focus on 

the steps the NAIC has taken to update the program since its inception in the early 1990’s and will analyze other areas for improving the financial regulation of insurers. 

Market Conduct Regulation. The Committee will review the need 

to modernize market conduct supervision to increase efficiency to 

better serve insurance consumers. The Committee will focus on the 

efforts of State insurance regulators to improve the quality and 

uniformity of market conduct oversight.

Agent Licensing Reform. The Committee will continue its review 

of the States’ progress in passing and implementing uniform or reciprocal insurance agency licensing reform and what further measures may be necessary to promote uniformity in agent licensing. 

Insurance Product Approval. The Committee will continue its review of the need to modernize the State product approval process 

to achieve uniformity, efficiency, and timeliness in the regulatory 

review of insurance rates and forms. This review will include an 

evaluation of the NAIC interstate compact proposal for life and 

health products as well as the NAIC improvements to State-based 

systems initiative for property and casualty products. The Committee will pay particular attention to State legislative efforts designed to adopt these proposals. 

National Insurance Uniformity. The Committee will review various alternatives for modernizing the regulation of insurance, including State by State improvements, coordination of State regulation through the NAIC, Federal promotion of State uniformity, proposals for an optional Federal charter, and other reforms for improving the efficiency and effectiveness of insurance regulation. 

Terrorism Insurance. The Committee will continue to monitor the 

terrorism insurance marketplace and will conduct oversight of the 

Terrorism Risk Insurance Act of 2002 (Public Law 107–297) and its 

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partments, and insurance underwriters, agents, and brokers, to ensure that the goals of the legislation are being met. 

Workers Compensation Insurance. The Committee will examine 

the current state of workers compensation insurance to determine 

the reasonableness of the types of claims and charges being made, 

and to consider whether further efficiencies or anti-fraud mechanisms can be developed. 

Insurance Marketing. The Committee will examine a number of 

consumer protection issues concerning the marketing of insurance 

products, potentially including the churning of life insurance, sales 

and marketing representations, coercion and pressure tactics, product bundling, and excessive premium charges for credit insurance 

and mortgage insurance. 

Insurance Fraud. The Committee will continue its examination of 

the efforts by the States, the NAIC, and other entities, to locate 

and fight insurance fraud. Specifically, the Committee will consider 

legislation that addresses the problem of ineffective regulation in 

the area of viaticals while encouraging this relatively new industry 

to provide consumers a valuable service. 

Insurance Consumer Protections. The Committee will examine 

the regulatory systems established by the States to protect consumers’ insurance interests. The Committee will also examine the 

practice of recording consumer inquiries as part of consumer claim 

records. 

Seniors’ Retirement Needs. The Committee will review the insurance needs particular to those contemplating or currently in retirement, including the use of annuities, long term care insurance, insurance pension programs, 401(k)s, as well as nursing care insurance and other old age insurance programs. The Committee’s focus 

will include newly marketed hybrid insurance instruments that incorporate features of securities and banking products. The Committee will examine whether seniors’ assets are being adequately 

protected and whether Federal and State financial regulators are 

ensuring that seniors’ products are being properly regulated without any gaps in functional oversight. 

Risk Retention Act. The Committee will conduct a review of alternative risk transfer arrangements to determine their effectiveness 

in offering consumers alternatives to traditional property and casualty insurance products. The Committee will focus particularly on 

the Risk Retention Act of 1981 and its 1986 amendments. 

Preemption of State Insurance Law. The Committee will review 

efforts by Federal agencies to preempt State laws governing insurance activities, and will also examine any controversial State insurance laws to ensure that they do not significantly interfere with 

Federally authorized powers of financial institutions. 

Professional Liability Insurance. The Committee will examine the 

current crisis in many sectors of professional liability insurance to 

determine whether further efficiencies and reforms are needed to 

abate the crisis. 

Insurance Litigation Reform. The Committee will review issues 

surrounding reform of asbestos insurance settlements, examining 

the reasonableness of fees and compensation awarded, determining 

to what degree the settlements serve the parties’ interests, and 

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ance marketplace. In particular, the Committee will focus on the 

effect of excessive asbestos awards on other insurance consumers, 

including the impact on the long term affordability and availability 

of property and casualty insurance for consumers. 

Holocaust Claims. The Committee will review efforts to ensure 

that restitution is made to Holocaust victims and heirs for confiscated bank accounts or payable insurance claims. The Committee 

will monitor the agreement of the German insurance industry to 

provide $275 million to pay Holocaust-era insurance claims and 

fund humanitarian purposes under an agreement with the international commission supervising the payment of claims.

Mold. The Committee will continue to investigate the potential 

deleterious effect of mold on homeowners and its effect on the insurance marketplace. The Committee will pay particular attention 

to the Center for Disease Control’s literature review regarding the 

effects of indoor exposure to mold which is expected this spring. 

Natural Disaster Insurance. The Committee will review the availability and affordability of natural disaster insurance for homeowners, and will consider proposals for improving insurers’ access 

to capital in the reinsurance, banking, and securities markets to 

ensure adequate capacity and solvency of the industry to meet consumer needs. The Committee will pay particular attention to the 

potential benefits of natural disaster securitization, catastrophic reinsurance, and proper long-term reserving. 

Homeowners’ Insurance—Price Controls, Underwriting Criteria, 

and Availability. The Committee will continue its review of the ongoing crisis in homeowners’ insurance availability in several States, 

including how State price controls diminish long term supply and 

options for coverage. The Committee will also examine how well 

different insurers’ underwriting criteria are causally linked to future claims paying estimates, and the impact of such criteria on 

the homeowners’ marketplace. This examination may potentially 

include how insurance claims and inquiries are scored, and how financial characteristics unrelated to a consumer’s insurance history 

are factored into the sale of homeowners’ insurance policies. 

Corporate-Owned Life Insurance. The Committee may review the 

practice of companies obtaining life insurance policies for certain 

employees, including any notifications given to those employees. 

SECURITIES ISSUES

Sarbanes-Oxley Implementation. The Committee will monitor and 

review the implementation of the Sarbanes-Oxley Act, including 

agency regulatory actions and the work of the Public Company Accounting Oversight Board created by the Act. 

Capital Formation. The Committee will review regulatory impediments to capital formation and seek both regulatory and market-based incentives for capital formation, including initial public 

offering (IPO) allocation, the role of venture capital providers, and 

ways to provide further incentives to enhance the supply of venture 

capital. 

Investor Restitution. The Committee will examine the adequacy 

of investor restitution regulations and whether additional measures 

are necessary to make defrauded investors whole. 

140

Double Taxation of Corporate Dividends. The Committee will examine the President’s proposal to eliminate the double taxation of 

corporate dividends and its impact on investors and the capital 

markets. 

Mutual Fund Fees. The Committee will undertake an examination of current trends in mutual fund fees, including the adequacy 

of disclosure to shareholders and the efficacy of that disclosure in 

promoting fee-based competition. Included in this review will be an 

examination of the benefits of providing dollar-specific fee information to investors on trade confirmations and/or shareholder account 

statements. 

Portfolio Transaction Expenses in Mutual Funds. The Committee 

will examine the transparency of portfolio transaction expenses incurred by mutual funds and consider the benefits to shareholders 

of requiring that those expenses be included in funds’ expense ratios, as well as what impact enhanced transparency of those expenses would have on churning by portfolio managers. 

Rule 12b–1. The Committee will review the role of 12b–1 marketing fees and whether investors are benefiting from economies of 

scale as a result of 12b–1 plans. The Committee will also review 

whether changes to Rule 12b–1 are necessary as a result of developments in fund distribution. 

Revenue Sharing Payments. The Committee will also examine 

revenue-sharing payments, also called distribution fees, made by 

mutual funds to brokerage firms to get access to their brokers. The 

Committee will explore the transparency of these arrangements, 

which may create conflicts of interest, and whether regulatory action is warranted. 

Soft-Dollar Practices. The Committee will examine the role of ‘‘soft-dollar’’ arrangements (such as providing computers or office 

space in lieu of payment) and the regulation and transparency of 

those arrangements, as well as their impact on investors, in particular with respect to mutual fund investors. 

International Accounting Practices. The Committee will review 

the work of the International Accounting Standards Board and the 

impact and importance of international accounting standards. 

Securities Investor Protection Corporation. The Committee will 

review the operations of the Securities Investor Protection Corporation and proposals to improve its effectiveness. 

Credit Rating Agencies. The Committee will examine the role of 

credit rating agencies, including whether there are conflicts of interest that should be disclosed to investors, and whether there are 

any barriers to entry. 

Money Laundering. The Committee will examine the potential 

use of mutual funds in money laundering, and consider what regulatory steps may be necessary to combat such activity.

Reducing Barriers to Efficiency for Mutual Fund Shareholders.

The Committee will review the impact of certain restrictions under 

section 17(a) of the Investment Company Act of 1940 on the efficiency of trading by mutual funds, in particular, in light of increasing affiliations among financial services firms in the wake of 

Gramm-Leach-Bliley. 

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ation of the so-called ‘‘technology bubble,’’ with a focus on the hundreds of technology and Internet funds established in the 1990’s. 

Corporate Governance. The Committee will examine the role and 

actions of directors of public companies and mutual funds, to ensure shareholders’ interests are being served. 

Portfolio Transparency. The Committee will consider ways to improve transparency of mutual fund holdings to investors, including 

the proposed rule currently under consideration at the SEC. 

Proxy Voting. The Committee will monitor the implementation of 

the Commission’s rule requiring funds to disclose the votes they 

cast on behalf of their shareholders. 

Securities Future Products. The Committee will review efforts to 

implement the provisions of the Commodity Futures Modernization 

Act of 2000 with regard to the trading of futures contracts based 

on securities. The Committee will undertake an analysis of the 

rules proposed thus far and their effectiveness in promoting broad 

and liquid security futures markets in the United States. 

Retirement Plan Management. The Committee, working with 

other Committees of jurisdiction, will examine the factors that influence selection of fund managers by retirement plan trustees. 

Market Structure. The Committee will review recent developments in the structure of the U.S. capital markets to determine 

what regulatory or other changes might further benefit competition 

and improve prices for investors. 

Investor Education and Literacy. The Committee will continue to 

promote efforts to increase investor education, with a focus on fees 

and expenses, particularly in the mutual fund area. 

Analyst Conflicts. The Committee will monitor the implementation of new rules affecting securities analysts to evaluate their efficacy in fighting conflicts of interest. 

Investment Banks and Accounting Fraud. The Committee will review the report by the GAO on the role of investment banks in the 

Enron collapse. 

IPO Allocation. The Committee will review current practices regarding allocation of IPOs and proposals to improve this process to 

increase investor access to IPOs as well as market efficiency and 

transparency. 

Financial Markets and the 9/11 Terrorist Attacks. The Committee will review studies pertaining to the recovery of the financial markets from 9/11 terrorist attacks and disaster recovery planning efforts by financial regulatory agencies and the financial services industry. 

Hedge Funds. The Committee will monitor the review by the 

SEC of the regulation of hedge funds, and consider the implications 

to U.S. markets if the hedge fund business were to move offshore. 

The Committee will also examine the access to hedge funds by investors and the risk disclosures that hedge fund investors must receive. 

GOVERNMENT SPONSORED ENTERPRISES

Federal Home Loan Bank System. The Committee will monitor 

various regulatory initiatives undertaken by the Federal Housing 

Finance Board, which oversees the Federal Home Loan Bank System, including proposals to allow members of the System to belong 

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to more than one of the twelve Federal Home Loan Bank districts, 

and to require the Federal Home Loan Banks to register the capital stock they sell to members with, and periodically report to, the 

Securities and Exchange Commission (SEC), under the Securities 

Exchange Act of 1934. 

GSEs and Financial Disclosure. In July 2002, Fannie Mae and 

Freddie Mac agreed to voluntarily register their common stock 

under the Securities Exchange Act of 1934. Registration under the 

Act triggers periodic disclosure requirements about the financial 

condition and management of companies that issue securities. The 

Committee will examine transparency and market discipline for 

the Government Sponsored Enterprises, including, and the status 

of, the voluntary registration by Fannie Mae and Freddie Mac 

under the Securities Exchange Act of 1934, the contents and recommendations of the study on MBS disclosure, and proposed financial disclosure by the Federal Home Loan Banks. 

OFHEO’s Risk-based Capital Standard. During the 107th Congress, the Office of Federal Housing Enterprise Oversight (OFHEO) 

finalized a risk-based capital rule for Fannie Mae and Freddie Mac. 

This regulation specifies the stress test to be used in determining 

the risk-based capital requirements for the two GSEs and, along 

with the minimum leverage capital requirement, the capital classifications for purposes of possible supervisory action. The Committee will hold hearings to review the initial stress test results, 

OFHEO’s proposed changes to the risk-based capital rule, 

OFHEO’s enforcement of the rule, and related safety and soundness issues, such as GSE interest rate risk management and duration gap.

GSE Regulatory Restructuring. Regulation of the housing GSEs 

is widely dispersed. The Office of Federal Housing Enterprise Oversight, an independent office within the Department of Housing and 

Urban Development, regulates the safety and soundness of Fannie 

Mae and Freddie Mac. HUD regulates Fannie Mae and Freddie 

Mac for mission compliance by setting affordable housing goals, approving new business activities, and conducting fair lending reviews. Similarly, the Federal Home Loan Banks are regulated by 

the Federal Housing Finance Board, an independent agency within 

the executive branch. Its purpose is to ensure that the FHLBs operate in a financially safe and sound manner and carry out their 

affordable housing and community investment mission programs. 

The Committee will examine whether the existing GSE regulatory 

structure should be reformed, whether the supervisory and enforcement powers of GSE regulators should be strengthened, and 

whether funding for GSE regulators should be subject to the Congressional appropriations process. 

HOUSING ISSUES

Mortgage Finance Reform/Real Estate Settlement Procedures Act.

The Committee may conduct additional hearings on the Department of Housing and Urban Development’s (HUD’s) proposed Real 

Estate Settlement Procedures Act (RESPA) rule. On July 29, 2002, 

HUD published its proposed rule to reform the Real Estate Settlement Procedures Act in the Federal Register (Vol. 67, No. 145) for 

a 90–day public comment period ending on October 28, 2002. The 

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proposed rule addresses the issue of loan originator compensation, 

reforms HUD’s Good Faith Estimate (GFE) settlement cost disclosures and removes other regulatory barriers to allow guaranteed 

packages of settlement services and mortgages offered to consumers. The Committee held a hearing on the proposed RESPA 

rule on October 3, 2002, and heard testimony from the Secretary 

of Housing and Urban Development, Mel Martinez. A second hearing on the RESPA rule will allow industry and consumer groups 

the opportunity to express their views on the proposed rule. 

Annual Budget Review of Housing and Urban Development, 

Rural Housing Service, National Reinvestment Corporation and the 

National Flood Insurance Program. During each session of the 

108th Congress, the Committee will conduct a hearing to consider 

the Administration’s proposal for the budget request for the coming 

fiscal year. The Committee will review and hear testimony from 

the Administration on those budgets under the jurisdiction of the 

Housing Subcommittee. Testimony is expected from the Department of Housing and Urban Development, Rural Housing Service, 

National Reinvestment Corporation and the National Flood Insurance Program. 

Federal Housing Administration. The Committee may conduct a 

hearing to review recent increases in Federal Housing Administration (FHA) default rates. HUD insures mortgages and loans made 

by HUD-approved lenders for a wide variety of purposes, including 

new construction, rehabilitation, property improvement, and refinancing in connection with a wide variety of types of property. 

FHA programs include all types of residential property (multifamily, single family, manufactured homes), nonresidential commercial property, hospitals and certain other healthcare facilities. 

These efforts are designed to encourage lenders to make credit 

more readily available and at lower rates for various purposes that 

might otherwise go unmet. Recent reports indicate that the FHA 

mortgage insurance program is operating with very high delinquency rates. The number of single family FHA loans reported to 

be delinquent (at least 30 days past due) was 11.62 percent at the 

end of the 3rd quarter of 2002. The number of FHA loans in the 

foreclosure process was 2.46 percent. This is compared to a 3.04 

percent delinquency rate and 1.15 percent in the foreclosure process for conventional loans at the end of the 3rd quarter of 2001. 

HUD Management Reform and Staffing. The Committee will conduct a comprehensive review of HUD’s management and staffing 

initiatives implemented in the past five years. Even though GAO 

has removed HUD’s designation as a ’’high risk’’ agency (first assigned in 1994) about 70 percent of the agency’s programs are still 

classified by the GAO as at high-risk for waste, fraud, and abuse. 

Weaknesses continue in HUD’s single-family mortgage insurance 

and rental housing assistance programs. With a significant number 

of Federal workers scheduled to retire in the next five to ten years, 

the Committee will investigate the technical and administrative 

needs of the agency to determine ways to assist the agency in continuing to meet its statutory obligations. 

HOPE VI. The Committee will conduct a comprehensive review 

of the HOPE VI program to facilitate a meaningful reauthorization 

process. The HOPE VI program is a demolition and revitalization 

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program designed specifically to address problems with severely 

distressed public housing developments. This program provides incentives for Public Housing Authorities (PHAs) and private entities 

to form partnerships and create mixed-finance and mixed-income 

affordable housing. The activities permitted under HOPE VI include, but are not limited to: the capital cost of demolition, major 

reconstruction, rehabilitation and other physical improvements. As 

part of its review, the Committee will consider greater access for 

smaller PHAs. In addition, other reforms and questions will be reviewed by the Committee, such as displacement of existing tenants 

and the net loss of affordable housing units. 

HUD Related Reauthorizations. The Committee will review, for 

appropriate action, expired—and expiring—authorizations relating 

to HUD. 

Section 8. The Committee will conduct a comprehensive review 

of the Section 8 program. There is considerable concern over the 

rising costs of the Section 8 program, which consumes over 50 percent of the total HUD discretionary budget each fiscal year. Concern has been expressed about unspent Section 8 funds that have 

accumulated in the reserve accounts of some Public Housing Authorities (PHAs). The Committee’s review will include an in-depth 

look at the formulas used, administrative fees, reserve accounts, 

HUD’s administration of the program, and the consequences of recaptured Section 8 funds. 

Public Housing. The Committee may conduct a comprehensive 

review of the Public Housing program, including HUD’s implementation of the program, the trends in operating subsidy, capital modernization, the role of the private sector in potential investment 

and finance of rehabilitation and modernization, and the role of 

Federal funds in the public housing account to train and employ 

existing PHA tenants as authorized under section 3 of the Housing 

and Urban Development Act of 1968. 

Minorities and Homeownership. The Committee will conduct 

hearings to review homeownership rates, particularly for underserved markets, e.g., minorities, inner-city neighborhoods, and 

women. The overall homeownership rate is approximately 68 percent; however, the average homeownership rate for African Americans and Hispanics is in the 40th percentile. The Committee will 

focus on homeownership disparity in order to fine-tune government 

policies, practices, and incentives that may preclude successful 

lending and ownership. 

National Flood Insurance Program. On January 13, 2003, the 

President signed legislation to reauthorize the National Flood Insurance Program (NFIP) through December 31, 2003 (Public Law 

108–3). This one year reauthorization will allow the Committee to 

conduct a comprehensive review of the program and to consider 

changes to make the program more cost effective. 

Rural Housing Service Multifamily Program/Rural Housing Prepayment. The Committee will review the Rural Housing Service 

(RHS) multifamily rental programs, specifically housing laws prohibiting prepayment of the debt of government-financed mortgage 

loans and recent trends in multifamily rural production in the loan 

guarantee and direct loan programs. 

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Community Development Block Grants. The Committee will review the Community Development Block Grant (CDBG) program 

and focus on management and operation of the program, including 

the timely expenditure of CDBG funds. 

Oversight of the Housing Authority of New Orleans and the Puerto Rico Public Housing Authority. On June 4, 2001, the Subcommittee on Oversight and Investigations held a hearing on the 

problems associated with the Housing Authority of New Orleans 

(HANO). The Committee will continue its review of HANO to determine if HUD’s administrative receivership has lead to significant improvements in both HUD’s and HANO’s management and 

operation. In addition, the Committee will review measures taken 

by HUD to correct widespread abuse in contracting and program 

management uncovered at the Puerto Rico Public Housing Authority, the second-largest public housing authority in the country. In 

July 2000, HUD’s Inspector General wrote to Congress and expressed serious concern with the adequacy of the measures HUD 

had taken to address the waste and loss of Federal funds by the 

Puerto Rico Public Housing Authority. 

Oversight of HUD and Rural Housing Service Financial and Information Systems. The Committee will conduct a comprehensive 

review of the financial and information systems at HUD and RHS. 

The lack of timely and comprehensive information continues to 

hamper both HUD and RHS’ ability to monitor the progress of programs and the use of its funds. The delay in the distribution of 

funds to communities continues to be a source of frustration for 

State and local governments and non-profit organizations. Over the 

years, significant funds have been spent to modernize financial and 

information systems; yet HUD and RHS are still unable to provide 

pertinent data necessary to monitor and administer the programs 

under its jurisdiction. The Committee will investigate how best to 

address this crucial problem. 

Oversight of HUD’s Public Housing Assessment System. The 

Committee will review HUD’s Public Housing Assessment System 

(PHAS) programs. The promise of the use of technology to streamline the PHAS has yet to be realized. In fact, it is only being used 

by project-based public housing programs. 

Faith-based Housing Initiatives. The Committee may conduct an 

oversight hearing on the participation of faith-based organizations 

in certain HUD programs. Over the years, Congress has enacted 

several provisions of law—known as ‘‘charitable choice’’ provisions 

that are intended to expand the involvement of faith-based groups 

in the delivery of a variety of the social programs. Congress has not 

enacted any similar law in the context of housing programs. On 

December 16, 2002, President Bush issued Executive Order 13279, 

Equal Protection of the Laws for Faith-Based and Community Organizations, which requires HUD to revise its regulations to implement the President’s faith-based initiative. On January 6, 2003, 

HUD issued proposed regulations, designed to further enhance the 

participation of faith-based organizations in certain HUD programs. (Participation in HUD Programs by Faith Based Organizations: Providing for Equal Treatment of All HUD Program Participants; Proposed Rule, 68 Federal Register 648, January 6, 2003.) 

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Homelessness. The Committee may conduct hearings on the issue 

of homelessness, including an analysis of the estimated number 

and profile of homeless persons in America, a review of HUD programs which provide housing and services to the homeless, and a 

review of the adequacy of those programs and funding levels in addressing the problem of homelessness. 

Housing Production. The Committee may conduct a hearing or 

series of hearings on the extent to which the existing housing stock 

meets the demand for affordable housing by low-income families, 

seniors, and disabled persons; a review of existing housing programs which are used in the construction or substantial rehabilitation of affordable housing units; and strategies for developing additional affordable housing units. 

Housing Preservation. The Committee may conduct a hearing on 

the issue of preservation of federally assisted housing. Issues may 

include the ongoing impact of Section 8 opt-outs and prepayments 

on the stock of affordable housing, review of the implementation of 

the 1997 Mark-to-Market legislation, and review of the implementation of the mark-up-to-market and enhanced vouchers provisions 

of Title V of the FY 2000 VA–HUD Appropriations bill. 

Fraud in the Housing Industry. The Committee will examine national and regional incidents of fraud in the housing and mortgage 

industry, its impact on the housing market and the affordability of 

mortgages, the response of Federal and State regulators, private financial institutions, and government sponsored enterprises, and 

the use of appraisals in this type of fraud. 

ECONOMIC DEVELOPMENT

Development of Economic Opportunities. The Committee will review economic development programs under the Committee’s jurisdiction, including programs administered by the Appalachian Regional Commission, the Economic Development Administration, 

and the newly created Delta Regional Authority. Reauthorization 

will be considered when appropriate. 

Reauthorization of the Defense Production Act. The Committee 

will review the performance of the Defense Production Act, which 

expires at the end of the current fiscal year, in preparation for its 

possible reauthorization. 

Community Development Financial Institutions Fund. In reviewing the expired authorization of the Community Development Financial Institutions (CDFI) Fund, created in 1994 to promote economic revitalization and community development, the Committee 

will examine the record of the Fund in implementing reforms 

pledged in 1997 to eliminate irregularities in the grant making 

process identified during the course of an investigation by the Subcommittee on General Oversight. The Committee will monitor the 

CDFI Fund’s implementation of the New Markets Tax Credits program, which was part of the Renewable Communities and New 

Markets initiative enacted into law during the 106th Congress. 

PRIME. The Committee will examine the implementation of a 

new microenterprise lending program—the Program for Investment 

in Microentrepeneurs Act, otherwise known as the PRIME Act—

that was included in GLB. 

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FEDERAL AGENCIES/AGENCY PROGRAM ISSUES

Management/Reform of the Federal Reserve System. The Committee will conduct oversight of the operations of the Federal Reserve System, including the System’s management structure, its 

role in providing financial services and in handling the clearing of 

paper checks, as well as its conduct of monetary policy. Special attention will be given to possible consolidation of operations, use of 

technology, control and oversight mechanisms, budget processes, 

pay and benefit levels, system-wide strategic planning and issues 

involving security. 

Federal Reserve’s Conduct of Monetary Policy. The Committee 

will hold hearings to receive the Chairman of the Federal Reserve 

Board of Governor’s semi-annual reports on the conduct of monetary policy. As part of this effort, the Committee will review issues 

associated with monetary policy and the state of the economy, such 

as developments in employment, productivity, and investment. 

Oversight of Agency Management Practices and Outcomes. The 

Committee will conduct oversight of the operations of all agencies 

under its jurisdiction to ensure disclosure of all material assets, liabilities, and costs of operations; to review agencies’ measures 

taken to minimize waste and inefficiency; to assess the impacts of 

agency actions on the financial services industry; and to determine 

if the agencies are operating at the most efficient level of resources. 

The Committee will require the Federal regulators to report on the 

state of the financial services industry in order to alert Congress 

to any emerging weaknesses and supervisory measures being taken 

to counter such weaknesses. The Committee will review, for appropriate action, expired—and expiring—authorizations relating to the 

agencies. 

Economic Security. The Committee will explore the need for Federal economic and financial regulators to prepare for and provide 

a coordinated response to economic events which threaten the Nation’s economic security. 

COINS, CURRENCY AND PAYMENT SYSTEM ISSUES

Management of the Nation’s Money: Activities of the Bureau of the 

Mint and the Bureau of Engraving and Printing. The Committee 

will conduct oversight of the activities of these Treasury bureaus 

as they relate to the printing and striking of U.S. currency and 

coins, and of the financing and minting of circulating and commemorative coins. The Committee will review the efficiency and 

productivity of these bureaus’ manufacturing operations, as well as 

the Numismatic Public Enterprise Fund. Technical changes to the 

authorizing statute for the latter will also be considered. The Committee will conduct oversight of issues relating to the circulation 

patterns of coins and currency, with an eye towards maximizing 

their availability and usefulness while minimizing the cost to taxpayers. In particular the Committee will focus on issues relating to 

the new one-dollar coin, including circulation patterns, U.S. Mint 

production-allocation decisions, a true unit cost of production for 

the dollar and other coins, management of the dollar-coin program 

throughout its life to date, the type and nature of the Mint’s expenditures on outside advertising and public relations firms for this 

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and other initiatives. The Committee also will analyze and conduct 

appropriate oversight related to recent Treasury Office of Inspector 

General reports relating to the Mint and Bureau of Engraving and 

Printing covering security, hiring, real-estate use and similar 

issues, and will consider the need for a U.S. Mint museum in 

Washington, D.C. 

Electronic Commerce and Payment Systems. The Committee will 

continue to assess the domestic and international implications of 

new innovations in electronic money and electronic payment systems. Among the issues the Committee may examine are soundness, security, privacy, access to new electronic payment methods, 

eligibility criteria for issuing new payment methods, competing 

government regulation, threats posed to critical infrastructures 

such as the payments system, and new-technology methods of authenticating transactions and minimizing fraud. 

Counterfeiting. The Committee will continue its review of efforts 

to detect and combat the counterfeiting of U.S. currency in the 

United States and abroad. Particular attention will be paid to anticounterfeiting successes by the United States Secret Service, especially in South America, and to ways those efforts can be made 

even more effective. The Committee will also monitor the migration 

of the Secret Service from the Treasury department to the new Department of Homeland Security, to ensure that the restructuring 

will not diminish the service’s anti-counterfeiting effectiveness. 

Also, the Committee will examine the integrity of other countries’ currencies, including counterfeiting of those currencies, to monitor 

any threats posed to the U.S. or world economies, and consider proposals to allow the Bureau of Engraving and Printing to aid other 

countries in efforts to strengthen the security of their currencies.

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PART B 

IMPLEMENTATION OF THE OVERSIGHT PLAN OF THE COMMITTEE ON FINANCIAL SERVICES FOR THE ONE HUNDRED EIGHTH CONGRESS 

INTERNATIONAL FINANCIAL ISSUES

Annual report and testimony by the Secretary of the Treasury on 

International Monetary Fund Reform and the State of the International Financial System. The Committee held hearings on the 

annual report on May 13, 2003, and March 25, 2004. The Secretary 

of the Treasury testified at each hearing on progress in reforming 

the International Monetary Fund (IMF), the status of efforts to reform the broader international financial system, and country compliance with IMF conditions assistance. The Committee monitored 

other developments in this area throughout the 108th Congress. 

Basel Capital Accord. On February 27, 2003, the Subcommittee 

on Domestic and International Monetary Policy, Trade, and Technology held a hearing entitled ‘‘The New Basel Accord—Sound Regulation or Crushing Complexity?’’ The Subcommittee on Financial 

Institutions and Consumer Credit held a hearing on June 19, 2003, 

entitled ‘‘The New Basel Accord: In Search of a Unified U.S. Position’’ and another hearing on June 22, 2004, entitled ‘‘The New 

Basel Accord: Private Sector Perspectives.’’ All of these hearings examined the impact of the new Basel Accord on the U.S. financial 

markets and the progress of the agreements. 

On November 3, 2003, the bipartisan leadership of the Financial 

Services Committee submitted their comments on the Advanced 

Notice of Proposed Rulemaking issued by Federal banking regulators regarding the Basel Capital Accord (68 Fed. Reg. 45900, No. 

149 (2003)), which cited specific concerns with the Accord during 

the advanced notice of proposed rulemaking. They also requested 

that the Federal banking regulators provide to the Committee various impact assessments for different sectors of the U.S. economy. 

On June 23, 2004, the Chairman and Ranking Member of the 

full Committee also sent a letter to the Federal financial regulators 

encouraging them to make additional changes to the Accord prior 

to adopting a final rule. The Committee examined whether the proposed new capital charges will have a discriminatory effect on U.S. 

financial institutions and whether there are any other potential unintended consequences stemming from the proposed Accord. The 

Committee also requested that the Federal Reserve provide a series 

of impact studies estimating the impact that the new capital framework would have on various aspects of the United States economy. 

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pleted in 2005. Through the Committee’s efforts, the regulators 

made several significant changes to the Basel II proposal. 

Financial Services Committee staff met periodically with Federal 

banking regulators to receive updates and provide feedback on 

Basel Committee issues. 

Export-Import Bank of the United States. In the 108th Congress, 

the Committee continued its oversight of the Export-Import Bank 

(Ex-Im) of the United States. On May 6th, 2004, the Subcommittee 

on Domestic and International Monetary Policy, Trade, and Technology held a hearing entitled ‘‘Oversight of the Export-Import 

Bank of the United States.’’ During this hearing, the Honorable 

Philip Merrill, President and Chairman of the Bank, discussed a 

variety of issues including the Export-Import Bank Reauthorization 

Act of 2002 (Public Law 107–189). This legislation made significant 

changes to the operation of the ’’Tied Aid’’ program and strongly 

encouraged the Bank to increase its transactions with small businesses. The Committee also urged Ex-Im to closely scrutinize 

transactions subject to anti-dumping and countervailing duty determinations. 

On September 10, 2003, the Committee received a report from 

the Government Accountability Office entitled: ‘‘Export Credit 

Agencies: Movement toward Common Environmental Guidelines, 

but National Differences Remain’’ (GAO–03–1093). This report was 

requested by the Chairman of the House Committee on International Relations, the Chairman of the Subcommittee on Domestic 

and International Monetary Policy, Trade, and Technology and the 

Chairman of the Subcommittee on Europe. 

Also on September 10, 2003, the Chairman and the Ranking 

Member of the full Committee and the Chairman and the Ranking 

Member of the Domestic and International Monetary Policy, Trade, 

and Technology Subcommittee wrote a letter to the Ex-Im board of 

directors concerning guarantees of loans to Malden Mills, a 1,200 

employee high-tech textile manufacturer and exporter. 

On August 11, 2004, Richard C. Shelby, Chairman, and Paul S. 

Sarbanes, Ranking Minority Member of the Senate Committee on 

Banking, Housing, and Urban Affairs and Michael G. Oxley, Chairman, and Barney Frank, Ranking Minority Member of the Committee on Financial Services received a GAO report titled ‘‘ExportImport Bank: OMB’s Method for Estimating Bank’s Loss Rates Involves Challenges and Lacks Transparency’’ (GAO–04–531) which 

calls for reforms of the Office of Management and Budget’s (OMB) 

methodology. That report was received by the Committee on September 30, 2004. The report examines the methodology used by the 

Ex-Im Bank of the United States to set expected loss rates for purposes of estimating its net future losses which will be subsidized 

by the United States taxpayers. The report expresses concern regarding the shift towards using corporate default rates in the ExIm formulas and the lack of transparency regarding recovery rate 

data within the Bank. 

U.S. Contributions to the International Financial Institutions.

The Committee continued to review U.S. participation in, and the 

effectiveness of, U.S. policy toward, the IMF, the World Bank 

Group, and the regional multilateral development banks (MDBs) in 

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lated to the international financial institutions during the testimony and questioning of the Secretary of the Treasury concerning 

the state of the international financial system, the Committee undertook a range of oversight actions. 

On October 29, 2003, the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology held a hearing 

entitled, ‘‘World Bank Lending to Iran.’’ On April 22, 2004, Chairman Oxley, Ranking Member Frank, and Mrs. Judy Biggert, Vice 

Chairman of the Domestic and International Monetary Policy, 

Trade, and Technology Subcommittee met with the Honorable Roberto Lavagna, Minister of Finance of Argentina, senior finance 

ministry officials, and Ambassador Jose Octavio Bordon to discuss 

the status of Argentina’s debt to public and private bondholders. 

North American Development Bank. While the Committee did not 

engage in any specific oversight activities on the North American 

Development Bank, the Committee reported legislation to facilitate 

its activities on February 25, 2003. That legislation, H.R. 254, was 

enacted on April 5, 2004 (Public Law 108–215). The Committee 

continued to monitor the operations of the NADBank through the 

108th Congress. 

Trade in Financial Services. With passage of the Trade Promotion Authority Act (Public Law 107–210), the Chairman and 

Ranking Minority Member of the full Committee were named to 

the Congressional Oversight Group on Trade. In this capacity, the 

Committee was active in the oversight of trade negotiations with 

Chile, Singapore, Australia, Morocco, Bahrain, and as well as with 

the Central American countries. On April 1, 2003, the Subcommittee on Domestic and International Monetary Policy, Trade, 

and Technology held a hearing entitled, ‘‘Opening Trade in Financial Services—The Chile and Singapore Examples’’ to examine the 

Chile and Singapore free trade agreements. 

The Committee staff consulted regularly with staff of the U.S. 

Trade Representative on matters within the jurisdiction of the 

Committee. As part of its oversight responsibilities, the Committee 

monitored negotiations for increased trade liberalization and consulted with U.S. counterparts to these negotiations. 

The Chairman of the full Committee also wrote letters supporting efforts for greater free trade in the Central American and 

Australian markets. On December 16, 2003, the Chairman sent a 

letter to United States Trade Representative Robert Zoellick encouraging the Ambassador to press for full liberalization of insurance services within the negotiations for the Central American 

Free Trade Agreement. On February 3, 2004, he sent a letter to 

Trade Representative Zoellick encouraging him to press for greater 

market access to the Australian banking market for U.S. banks. 

International Corporate Governance Issues. On May 13, 2004, the 

full Committee held a hearing entitled, ‘‘The US-EU Regulatory 

Dialogue and its Future.’’ Witnesses included representatives from 

the Treasury Department, Federal Reserve Board, Securities and 

Exchange Commission (SEC), Public Company Accounting Oversight Board (PCAOB) and European Commission. At this hearing, 

the Committee received testimony from Dr. Alexandre Schaub, Director General, Directorate General for the Internal Market, European Commission. The Committee also received testimony from the 

152

PCAOB regarding its plans for implementing the Sarbanes-Oxley 

Act of 2002 (Public Law 107–204) internationally and the first testimony from the Securities and Exchange Commission regarding its 

new relationship with the Committee of European Securities Regulators. 

On June 17, 2004, the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology held a follow-up 

hearing entitled, ‘‘The US-EU Regulatory Dialogue: The Private 

Sector Perspective.’’ Witnesses included representatives of the 

banking and securities industries as well as academia. The Committee monitored other developments in this area throughout the 

108th Congress. 

International Debt Relief. On April 20, 2004, the Subcommittee 

on Domestic and International Monetary Policy, Trade, and Technology held a hearing entitled ‘‘HIPC Debt Relief: Which Way Forward?’’ This hearing was held to receive a GAO report entitled, ‘‘Developing Countries: Challenges in Financing Poor Countries’’ Economic Growth and Debt Relief Targets’’ (GAO–04–688T), which 

included estimates of the likely cost to U.S. taxpayers of the High 

Indebted Poor Countries (HIPC) initiatives. 

Administration’s Millennium Challenge Account. On June 11, 

2003, the Subcommittee on Domestic and International Monetary 

Policy, Trade, and Technology held a hearing entitled ‘‘Matching 

Capital and Accountability—the Millennium Challenge Account.’’ The Committee continued to monitor developments in the establishment of the Millennium Challenge Corporation and the Treasury Department’s role as a member of the board of directors of that 

corporation. 

Global Fund to Fight AIDS, Tuberculosis and Malaria. Although 

the Committee took no direct oversight action on this topic, the 

Committee monitored the developments in this area throughout the 

108th Congress. 

Coordination of International Financial Services Programs. Although the Committee took no direct oversight action on this topic, 

the Committee monitored the developments in this area throughout 

the 108th Congress. 

International Monetary Issues: On October 1, 2003, the Subcommittee on Domestic and International Monetary Policy, Trade, 

and Technology held a hearing entitled ‘‘China’s Exchange Rate Regime and its Effects on the U.S. Economy.’’ This hearing focused 

on the need for China to adopt market-based exchange rate policies. 

International Counter-Terrorism Finance Policy. On September 

30, 2004, the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology held a joint hearing with the 

Subcommittee on Oversight and Investigations entitled ‘‘Combating 

International Terrorist Financing.’’ This hearing built on the earlier work of the Committee and the Subcommittee on Oversight 

and Investigations which held numerous hearings and several classified briefings on tracking, seizing, and freezing terrorist assets. 

Through its extensive oversight on the topic, the Committee discovered that many of the impediments to effectively stopping terrorist 

financing lie outside of the United States’ borders, and has encouraged the Administration, both formally and informally, to take all 

153

necessary actions to eliminate avenues for terrorist financing at 

home and abroad. 

FINANCIAL INSTITUTIONS

Implementation of USA PATRIOT Act. The Committee held multiple oversight hearings on the implementation of the anti-money 

laundering and counter-terrorist financing provisions of title III of 

the USA PATRIOT Act (Public Law 107–56). Many of the hearings 

were conducted by the Subcommittee on Oversight and Investigations, including a March 11, 2003, review of the effectiveness of 

post-September 11, 2001, efforts to combat terrorist financing, an 

examination of government initiatives to freeze the assets of terrorist organizations on September 24, 2003, and a September 30, 

2004, joint hearing with the Subcommittee on Domestic and International Monetary Policy entitled ‘‘Combating International Terrorist Financing.’’ The full Committee held a hearing on August 23, 

2004, entitled ‘‘The 9/11 Commission Report: Identifying and Preventing Terrorist Financing’’ to hear testimony on the recommendations of the National Commission on Terrorist Attacks on 

the United States (the 9/11 Commission), which featured testimony 

from senior officials at the Departments of Treasury, Justice, and 

Homeland Security on their efforts to implement Title III of the 

PATRIOT Act. 

Money Laundering. In addition to oversight of government and 

private sector implementation of the USA PATRIOT Act, the Committee conducted extensive oversight of a variety of other antimoney laundering compliance and enforcement issues. On May 18, 

2004, the Subcommittee on Oversight and Investigations held a 

hearing entitled ‘‘Improving Financial Oversight: Private Sector 

View of Anti-Money Laundering Efforts’’ to solicit private sector 

views on the effectiveness of anti-money laundering compliance efforts. On June 2, 2004, the Subcommittee on Oversight and Investigations held a hearing entitled ‘‘Risk Management and Regulatory Failures at Riggs Bank and UBS’’ that focused on antimoney laundering compliance and oversight deficiencies at Riggs 

Bank of Washington, D.C, and the abuse of UBS of the Federal Reserve’s ECI program. 

Throughout the 108th Congress, the Committee conducted an ongoing review of the Federal banking agencies’ anti-money laundering examination procedures and enforcement actions, both 

through formal oversight hearings in the Subcommittee on Oversight and Investigations and the full Committee and numerous 

staff briefings with relevant regulatory authorities. 

Deposit Insurance Reform. While the Committee proceeded to 

consider legislation to reform the Federal Deposit Insurance system, the Committee continued to monitor the operation of the current system. On March 4, 2004, the Subcommittee on Oversight 

and Investigations held an oversight hearing on the Federal Deposit Insurance Corporation, which featured a detailed examination 

of the financial condition of the deposit insurance funds administered by the FDIC. 

Implementation of Gramm-Leach-Bliley Act. The full Committee 

and the Subcommittee on Oversight and Investigations reviewed 

various aspects of the implementation of the Gramm-Leach-Bliley 

154

financial modernization law through a series of oversight hearings 

on the Federal banking agencies under the Committee’s jurisdiction. In addition, on October 14, 2004, the Chairman of the full 

Committee and its Ranking Minority Member, along with nine 

other senior members of the Committee, filed a comment letter 

with the SEC expressing serious concerns regarding the SEC’s proposed regulation implementing title II of the Gramm-Leach-Bliley, 

which governs the conduct of certain securities-related activities 

within banking organizations. 

Fair Credit Reporting Act. During the First Session of the 108th 

Congress, the Committee held a series of oversight hearings on the 

operation of the national credit reporting system, culminating in 

the enactment of the Fair and Accurate Credit Transactions Act on 

December 4, 2003 (Public Law 108–159). 

On May 8, 2003, the Subcommittee on Financial Institutions and 

Consumer Credit held a hearing entitled ‘‘The Importance of the 

National Credit Reporting System to Consumers and the U.S. 

Economy’’ which focused on the economic benefits of a national 

credit reporting system and current consumer protections under 

the Fair Credit Reporting Act (FCRA), as well as the importance 

of a uniform national credit system to the retail operations of commercial users and furnishers of credit reporting data. On June 4, 

2003, the Subcommittee on Financial Institutions and Consumer 

Credit held a hearing entitled ‘‘The Fair Credit Reporting Act: How 

it functions for Consumers and the Economy’’ on the role of the 

States in enforcing the FCRA; how credit reports, credit scores, and 

prescreened information are used by the lending, mortgage, consumer finance, insurance, and non-financial industries; the accuracy of credit reports; and the role of national uniform standards 

in improving markets for consumers, including how such uniformity affects the availability, affordability, and timeliness of financial products and services. 

On June 12, 2003, the Subcommittee on Financial Institutions 

and Consumer Credit held a hearing entitled ‘‘The Role of FCRA 

in the Credit Granting Process’’ which focused on the use of credit 

reports in the mortgage lending process as well as in other forms 

of consumer lending, including credit cards and bank loans. On 

June 17, 2003, the Subcommittee on Financial Institutions and 

Consumer Credit held a hearing entitled ‘‘The Role of FCRA in Employee Background Checks’’ which focused on the role of the FCRA 

in employee background checks and investigations of employee misconduct, as well as in the collection and use of medical information 

by financial services firms. 

On June 24, 2003, the Subcommittee on Financial Institutions 

and Consumer Credit held its final hearing on the FCRA, entitled 

‘‘Fighting Identity Theft—The Role of FCRA’’ focusing on current 

enforcement efforts to apprehend and prosecute identity thieves, 

the experiences of consumers victimized by identity theft, and innovative private sector efforts to prevent identity theft and assist victims. 

Following enactment of the FACT Act, the Committee monitored 

regulatory implementation of the law, through a series of staff 

meetings with the Federal Trade Commission and Federal banking 

agencies. 

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Financial Privacy and Identity Theft. On April 3, 2003, the Subcommittees on Financial Institutions and Consumer Credit and 

Oversight and Investigations held a joint hearing entitled ‘‘Fighting 

Fraud: Improving Information Security’’ to gather testimony on instances of information security breaches resulting in the disclosure 

of confidential customer financial information. On June 24, 2003, 

the Subcommittee on Financial Institutions and Consumer Credit 

held a hearing on the role of the FCRA in helping to combat identity theft, described above. 

Internet Gambling. The Committee continued to monitor the use 

of the payments system to facilitate illegal gambling over the Internet. The Committee’s continued oversight in this area resulted in 

the passage of legislation (H.R. 2143) by the House in the 108th 

Congress. 

Payments Systems Innovations. During the first session, the 

Committee shepherded the Check Clearing for the 21st Century 

Act to enactment, which focused on improving the check clearing 

process through the use of new technology. The Committee monitored implementation of the new law, including numerous staff 

briefings with Federal banking agencies and other interested parties, during the remainder of the 108th Congress. 

Credit Unions. On July 20, 2004, the Subcommittee on Financial 

Institutions and Consumer Credit held a hearing entitled ‘‘Credit 

Union Regulatory Improvements’’ on proposed improvements in the 

regulatory treatment of credit unions. In addition, the Committee 

examined credit union regulatory issues in the context of its consideration of financial services regulatory relief legislation (H.R. 

1375). On June 19, 2003, Chairman Oxley, Ranking Member 

Frank, and Mr. Sherman requested that the GAO study issues relating to the capital or net worth requirements applicable to Federally insured credit unions. On August 6, 2004, the GAO reported 

the findings of its study to the Committee in its report entitled 

‘‘Credit Unions: Available Information Indicates No Compelling 

Need for Secondary Capital’’ (GAO–04–849). 

Financial Supervision. During the 108th Congress, the Committee and its subcommittees exercised continuous oversight of the 

supervision of insured depository institutions, both through hearings and staff briefings with relevant Federal regulatory agencies. 

On January 28, 2004, the Subcommittee on Oversight and Investigations held a hearing entitled ‘‘Congressional Review of OCC 

Preemptions’’ and focused on proposed regulations by the Office of 

the Comptroller of the Currency governing the applicability of 

State law to the activities of national banks. 

On March 4, 2004, the Subcommittee held an oversight hearing 

on the Federal Deposit Insurance Corporation, which administers 

the Federal deposit insurance funds as well as serving as the primary Federal supervisory authority for over 5,000 State-chartered 

banks. On April 1, 2004, the full Committee held an oversight 

hearing on the OCC, which supervises some 2,000 national banks. 

On June 16, 2004, the Subcommittee held an oversight hearing on 

the operations of the Department of the Treasury which focused on 

bank supervision and compliance issues. On July 20, 2004, the 

Subcommittee on Financial Institutions and Consumer Credit held 

a hearing on the regulatory supervision of credit unions. 

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Regulatory Burden Reduction. On May 12, 2004, the Subcommittee on Financial Institutions and Consumer Credit held a 

hearing on proposals to reduce or eliminate regulatory burdens on 

America’s community-based banks. On July 20, 2004, the Subcommittee on Financial Institutions and Consumer Credit held a 

hearing on legislative proposals to improve the regulatory treatment of credit unions. 

CONSUMER PROTECTION

Consumer Protections. The Subcommittees on Financial Institutions and Consumer Credit and Housing and Community Opportunity held hearings on November 5, 2003, March 30, 2004, and 

June 23, 2004, on preserving access to credit and combating abusive practices in the subprime mortgage market. On September 15, 

2004, the Subcommittee on Financial Institutions and Consumer 

Credit held a hearing entitled ‘‘Financial Services Issues: A Consumer’s Perspective’’ which addressed a broad range of consumer 

protection issues. 

On April 2, 2004, the Chairman of the full Committee, the Chairman of the Subcommittee on Financial Institutions and Consumer 

Credit and Mr. Garrett of New Jersey wrote to the Federal Trade 

Commission (FTC), requesting the agency’s views on legislation to 

amend the Fair Debt Collection Practices Act (H.R. 3066). The FTC 

provided its views to the Committee in a letter dated June 23, 

2004. 

Credit Card Regulation. On June 24, 2003, the Subcommittee on 

Financial Institutions and Consumer Credit held an oversight 

hearing on the role of the Fair Credit Reporting Act in fighting 

identity theft. The hearing featured testimony from major credit 

card associations and credit card issuers. On September 15, 2004, 

the Subcommittee on Financial Institutions and Consumer Credit 

held a hearing on consumer protection issues, including credit card 

industry practices. 

First Accounts/Electronic Transfer Accounts. Although the Committee conducted only limited oversight of the First Accounts program, two hearings were held on similar issues relating to expanding the availability of basic banking services to historically underserved populations. On June 26, 2003, the Subcommittee on Financial Institutions and Consumer Credit held a hearing entitled 

‘‘Serving the Underserved: Initiatives to Broaden Access to the Financial Mainstream’’ which focused on public and private sector 

initiatives to broaden access to the financial mainstream by low 

and moderate-income consumers. 

On October 1, 2003, the full Committee held a hearing, entitled ‘‘Remittances: Reducing Costs, Increasing Competition, and Broadening Access to the Market,’’ on expanding the availability of financial services by reducing costs and increasing competition in the 

rapidly growing market for international remittances. 

Enforcement of Anti-tying Laws. On April 29, 2003, Chairman 

Oxley and Ranking Member Frank requested that the GAO conduct a review of compliance with and enforcement of Federal antitying laws, which prohibit commercial banks from conditioning the 

availability or terms of loans or other credit products on the purchase of certain other financial products or services. On October 10, 

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2003, the GAO released its report, entitled ‘‘Bank Tying: Additional 

Steps Needed to Ensure Effective Enforcement of Tying Prohibitions’’ (GAO–04–4). 

Effects of Technological Advances on Residential Real Estate 

Market. On November 4, 2004, Chairman Oxley requested that the 

GAO conduct a study of how the provision of real estate services 

to prospective homebuyers may be affected by new forms of information technology and electronic commerce. The Committee does 

not expect to receive the results of that study until the 109th Congress. 

INFORMATION SECURITY

Data Protection. Although the Committee took no direct oversight 

action on this topic, the Committee monitored the developments in 

this area throughout the 108th Congress. 

Antifraud Network. The Subcommittees on Oversight and Investigations and Financial Institutions and Consumer Credit held a 

joint hearing on Thursday, April 3, 2003, entitled ‘‘Fighting Fraud: 

Improving Information Security.’’ This hearing was designed to review current industry practices to ensure that proper security procedures and protocols are in place or are being implemented on 

how credit issuers, third-party vendors that process transactions, 

credit bureaus, and law enforcement coordinate their efforts to 

limit harm to consumers when data security is breached. 

Cybersecurity. The Subcommittee on Capital Markets, Insurance, 

and Government Sponsored Enterprises held a hearing on February 12, 2003, entitled ‘‘Recovery and Renewal: Protecting the 

Capital Markets against Terrorism Post–9/11’’ to examine measures put in place since the attacks of September 11, 2001, to protect the financial markets in case of a terrorist attack. These measures were further examined by the full Committee in a hearing 

held on September 8, 2004, entitled ‘‘Protecting Our Financial Infrastructure: Preparation and Vigilance’’ which examined the preparedness of the financial services sector in light of the ‘‘Code Orange’’ alert declared in the summer of 2004. 

On Monday, October 20, 2003, the Subcommittee on Oversight 

and Investigations held a hearing entitled, ‘‘Government and Industry Efforts to Protect Our Money During Blackouts, Hurricanes, 

and Other Disasters.’’ The Subcommittee reviewed the private financial sector response to these events to determine if recommendations from the President through Executive Order 13231 

of October 2001, and Presidential Decision Directive 63 stemming 

from 9/11 failures had been implemented and carried out during 

the August 2003 blackout. The Order created Governmental committees to plan a response to attacks against American assets critical to the continued normal operation of a variety of sectors, including the financial sector. Officials of the Treasury Department, 

Federal Reserve System, SEC, other financial regulators, and financial services companies responded to the blackout by implementing arrangements established by those directives and cooperative arrangements among the various sectors and minimized the 

impact on banking and financial institutional customers and investors. 

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Committee staff continues to be briefed by various financial services sector representatives and regulators to ensure that safeguards 

remain in place against both physical and cyber threats. 

Electronic Signatures and E-Commerce. Although the Committee 

took no direct oversight action on this topic, the Committee monitored the developments in this area throughout the 108th Congress. 

INSURANCE

Insurance Solvency, Market Conduct, and Agent Licensing Regulation. The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held hearings on this and related 

issues on April 10 and November 5, 2003, and March 31, 2004. 

On April 10, 2003, the Capital Markets subcommittee held a 

hearing entitled ‘‘The Effectiveness of State Regulation: Why Some 

Consumers Can’t Get Insurance.’’ This hearing focused on the unavailability of personal insurance for consumers in States and the 

lack of capital for the insurance industry as a whole. The Subcommittee heard testimony from the Director of the South Carolina 

Department of Insurance, representatives from several trade associations, and an economist. 

On November 5, 2003, the Capital Markets Subcommittee held 

a hearing entitled ‘‘Reforming Insurance Regulation—Making the 

Marketplace More Competitive for Consumers.’’ The hearing focused on the status of National Association of Insurance Commissioners (NAIC) initiatives to modernize State insurance regulation 

and the prospects for State-based reform. The hearing also reviewed other proposed solutions to increase the efficiency and uniformity of insurance regulation. The Subcommittee heard testimony from several State insurance officials, representatives from 

State legislatures, and executives from several trade associations 

and industry groups. 

On March 31, 2004, the Capital Markets Subcommittee held a 

hearing entitled ‘‘Working with State Regulators to Increase Insurance Choices for Consumers.’’ The purpose of the hearing was to 

examine how to make State insurance regulation more efficient, 

uniform, and effective for consumers. Witnesses testifying before 

the Subcommittee included several State insurance officials and 

representatives from various trade associations as well as marketplace participants and analysts. 

Insurance Product Approval. The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held hearings which discussed the process for insurance product approval on 

November 5, 2003, and March 31, 2004. 

National Insurance Uniformity. In order to better understand the 

current structure of insurance regulation, the Chairman of the full 

Committee asked the GAO to conduct a review of all Federal insurance programs in which the Federal government is responsible for 

all or part of the risk. The GAO has not finalized this report but 

has briefed the Committee on its work on an ongoing basis. The 

Subcommittee on Capital Markets, Insurance, and Government 

Sponsored Enterprises held hearings on national insurance uniformity on April 10, 2003, November 5, 2003, and March 31, 2004. 

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Terrorism Insurance. On April 2, 2004, the Chairman of the full 

Committee asked the GAO to conduct a review of the progress 

made by the Treasury Department and the insurance industry in 

implementing the provisions of the Terrorism Risk Insurance Act 

of 2002 (TRIA), as well as changes in the market for terrorism insurance coverage under TRIA. The GAO presented its findings in 

a report entitled ‘‘Terrorism Insurance: Implementation of the Terrorism Risk Insurance Act of 2002’’ (GAO–04–307) on April 28, 

2004, at a joint hearing of the Subcommittee on Capital Markets, 

Insurance, and Government Sponsored Enterprises and the Subcommittee on Oversight and Investigations entitled ‘‘A Review of 

TRIA and its Effect on the Economy: Helping America Move Forward.’’

Workers Compensation Insurance. The Committee examined 

workers compensation insurance issues within the context of its 

oversight over terrorism insurance. The Committee monitored developments in this area throughout the 108th Congress. 

Insurance Marketing. In response to revelations that members of 

the military had been sold inappropriate insurance products under 

questionable circumstances, the Subcommittee on Capital Markets, 

Insurance, and Government Sponsored Enterprises held a hearing 

on insurance marketing to military service personnel entitled ‘‘G.I. 

Finances: Protecting Those Who Protect Us’’, on September 9, 2004. 

The Subcommittee hearing led to Committee action on H.R. 5011, 

the Military Personnel Financial Services Protection Act. 

Insurance Fraud. Although the Committee took no direct oversight action on this topic, the Committee monitored developments 

in this area throughout the 108th Congress. 

Insurance Consumer Protections. The Subcommittee on Capital 

Markets, Insurance, and Government Sponsored Enterprises held 

hearings on April 10, 2003, November 5, 2003, March 31, 2004, and 

September 9, 2004, that covered issues related to insurance consumer protections. 

Senior Retirement Needs. The Subcommittee on Capital Markets, 

Insurance, and Government Sponsored Enterprises held a hearing 

on senior retirement needs entitled ‘‘Retirement Security: What 

Seniors Need to Know about Protecting Their Futures’’, on May 15, 

2003. The Committee monitored developments in this area 

throughout the 108th Congress. 

Risk Retention Act. On January 2, 2004, the Chairman asked the 

GAO to assess how well risk retention groups and risk purchasing 

groups established under the 1986 Risk Retention Act have 

achieved their intended purposes. The GAO has not finalized this 

report, but has briefed the Committee on its work on an ongoing 

basis. The Committee has monitored other developments in this 

area throughout the 108th Congress. 

Preemption of State Insurance Law. The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises 

held hearings which covered this issue on November 5, 2003, and 

March 31, 2004. 

Professional Liability Insurance. Although the Committee took no 

direct oversight action on this topic, the Committee monitored developments in this area throughout the 108th Congress. 

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Insurance Litigation Reform. Although the Committee took no direct oversight action on this topic, the Committee monitored developments in this area throughout the 108th Congress. 

Holocaust Claims. Although the Committee took no direct oversight action on this topic, the Committee monitored developments 

in this area throughout the 108th Congress. 

Mold. The Committee continued to monitor developments concerning the risks associated with exposure to mold and poor indoor 

air as discussed at a Committee hearing in the 107th Congress, including receipt by the Committee of a study released in May 2004, 

by the Centers for Disease Control (CDC) entitled, ‘‘Damp Indoor 

Spaces and Health.’’ Natural Disaster Insurance. On February 2, 2004, the Chairman 

asked the GAO to undertake a study on the ability of U.S. consumers to purchase insurance for potentially catastrophic losses 

caused by natural disasters, as well as the extent to which such 

losses would be covered by existing insurance policies. Other areas 

of investigation include potential barriers to the issuance of catastrophe bonds as well as the tax and accounting treatment of longterm catastrophic insurance risks in various foreign countries. The 

GAO has not finalized this report but has briefed the Committee 

on its work on an ongoing basis. 

The Committee also examined natural disaster insurance issues 

within the context of oversight of terrorism insurance and monitored other developments in this area throughout the 108th Congress. 

Homeowners’ Insurance-Price Controls, Underwriting Criteria 

and Availability. This topic was covered in the Subcommittee on 

Capital Markets, Insurance, and Government Sponsored Enterprises hearings on April 10, 2003, November 5, 2003, and March 

31, 2004. 

Corporate Owned Life Insurance. Although the Committee took 

no direct oversight action on this topic, the Committee monitored 

developments in this area throughout the 108th Congress.

SECURITIES ISSUES

Sarbanes-Oxley Implementation. The Committee held a hearing 

on September 17, 2003, on the actions of the Public Company Accounting Oversight Board (PCAOB), created under title I of the 

Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley). On February 4, 

2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing on the new standards of attorney professional conduct promulgated under SarbanesOxley. The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing on June 24, 2004, 

on the PCAOB’s registration and inspections of public accounting 

firms and auditing, quality control and ethics standards setting. On 

July 22, 2004, the Committee held a hearing to examine the impact 

of Sarbanes-Oxley on public companies and public accounting 

firms. Throughout the 108th Congress, the PCAOB regularly 

briefed the Committee staff on its rulemaking proceedings. 

Capital Formation. The Subcommittee on Oversight and Investigations held a hearing on July 15, 2004, entitled ‘‘Diversity in the 

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Owned Businesses: Challenges and Opportunities.’’ The hearing examined, among other things, the access to capital of minorityowned businesses. On September 15, 2004, the SEC briefed the 

Subcommittees on Oversight and Investigations and Capital Markets, Insurance, and Government Sponsored Enterprises on small 

business capital formation. The Subcommittee on Oversight and Investigations held a hearing on September 23, 2004, entitled ‘‘Encouraging Small Business Growth and Access to Capital,’’ to examine regulatory impediments and incentives to the capital formation 

of small businesses. 

Investor Restitution. The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing on 

February 26, 2003, entitled ‘‘It’s Only FAIR: Returning Money to 

Defrauded Investors,’’ to examine the SEC’s efforts in returning 

monies to defrauded investors. 

Double Taxation of Corporate Dividends. The Subcommittee on 

Oversight and Investigations held a hearing entitled ‘‘Paying Dividends: How the President’s Tax Plan Will Benefit Individual Investors’’ on March 18, 2003, to examine the impact on investors and 

the capital markets of the President’s proposal to eliminate the 

double taxation of corporate dividends. 

Mutual Fund Fees, Portfolio Transaction Expenses in Mutual 

Funds, Rule 12b–1, Revenue Sharing Payments, and Soft Dollar 

Practices. The Chairman of the full Committee and the Chairman 

of the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises sent a letter on January 7, 2003, to 

the Chairman of the SEC and the Chairman of the National Association of Securities Dealers (NASD) requesting information relating to the investigation of brokers’ failure to award breakpoint discounts to eligible mutual fund investors. They also asked the GAO 

on January 14, 2003, to conduct a study on mutual fund fees and 

expenses and the disclosure and transparency of these costs, including the topics listed above. This study, entitled ‘‘Mutual Funds: 

Greater Transparency Needed in Disclosures to Investors’’ (GAO–

03–763), was completed and released in June 2003. 

The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘Mutual Fund 

Industry Practices and their Effect on Individual Investors’’ on 

March 12, 2003, to examine these issues. On March 26, 2003, the 

Chairman of the Subcommittee on Capital Markets, Insurance, and 

Government Sponsored Enterprises sent a letter to the Chairman 

of the SEC requesting information relating to mutual fund fees. 

This work resulted in Committee approval of H.R. 2420, the Mutual Funds Integrity and Fee Transparency Act of 2003, a bill designed to encourage fee-based competition among mutual funds, on 

July 23, 2003. After the Committee completed its action on the 

measure, the Chairman of the full Committee and the Chairman 

of the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises sent a letter on July 30, 2003, to the 

Chairman of the SEC requesting that the SEC use its existing regulatory authority to implement certain provisions of H.R. 2420 not 

requiring legislative action. 

The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises continued its work on this matter, 

162

holding two days of hearings on November 4, 2003, and November 

6, 2003, entitled ‘‘Mutual Funds: Who’s Looking Out for Investors.’’

That hearing focused on mutual fund fees and related issues. 

International Accounting Practices. In January 2004, the SEC 

briefed the Committee staff regarding its investigation into the accounting irregularities at Parmalat SpA. Among the issues discussed at the hearings held by the Subcommittee on Domestic and 

International Monetary Policy, Trade, and Technology on May 13 

and June 17, 2004, on the U.S.-E.U. Regulatory Dialogue was the 

convergence of accounting standards promulgated by the Financial 

Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). 

Securities Investor Protection Corporation. Although the Committee took no direct oversight action on this topic, the Committee 

monitored the developments in this area throughout the 108th 

Congress. 

Credit Rating Agencies. In January 2003, the Committee received 

a report, ‘‘The Role and Function of the Credit Rating Agencies,’’

from the SEC pursuant to a requirement in Sarbanes-Oxley. The 

Subcommittee on Capital Markets, Insurance, and Government 

Sponsored Enterprises held hearings to examine credit rating agencies on April 2, 2003, and September 14, 2004. The Chairman of 

the Subcommittee on Capital Markets, Insurance, and Government 

Sponsored Enterprises sent a letter on April 10, 2003, to the Chairman of the SEC requesting information relating to credit rating 

agencies. This information was provided in June 2003. 

Money Laundering. The matter of money laundering and terrorist financing through the use of brokerage accounts and the capital markets was discussed in the context of the Committee’s overall efforts to conduct oversight over anti-money laundering and terrorist financing operations. For more detail, see those entries earlier in this section. 

Reducing Barriers to Efficiency for Mutual Fund Shareholders.

Although the Committee took no direct oversight action on this 

topic, the Committee monitored the developments in this area 

throughout the 108th Congress. 

The Role of Mutual Funds in the Technology Bubble. Although 

the Committee took no direct oversight action on this topic, the 

Committee monitored the developments in this area throughout the 

108th Congress. 

Corporate Governance. In addition to the oversight activities on 

mutual funds described above, which included a review of mutual 

fund corporate governance, the Subcommittee on Capital Markets, 

Insurance, and Government Sponsored Enterprises held a hearing 

on the new standards of attorney professional conduct promulgated 

under the Sarbanes-Oxley Act on February 4, 2004. 

On March 11, 2004, the Chairman of the Full Committee and the 

Chairman of the Subcommittee on Capital Markets, Insurance, and 

Government Sponsored Enterprises, along with three Senators, 

sent a letter to the Chairman of the SEC in support of the SEC’s 

proposed rule requiring independent chairmen at mutual fund companies. The Chairman of the full Committee also sent a letter on 

May 20, 2004, to the Chairman of the SEC in support of the SEC’s 

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proposed rule requiring independent chairmen at mutual fund companies. 

On June 24, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘Oversight of the Public Company Accounting Oversight 

Board’’ which focused on the PCAOB’s registration and inspections 

of public accounting firms and auditing, quality control and ethics 

standards setting. 

On July 21, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘Shell Games: Corporate Governance and Accounting for Oil 

and Gas Reserves. This hearing focused on Shell Oil Company’s accounting for oil and gas reserves and corporate governance structure. 

The full Committee also held a hearing to examine the impact 

of Sarbanes-Oxley on public companies and auditing firms, including those provisions strengthening corporate governance at public 

companies, on July 22, 2004, entitled ‘‘Sarbanes/Oxley: Two Years 

of Market and Investor Recovery.’’ Portfolio Transparency. The Subcommittee on Capital Markets, 

Insurance, and Government Sponsored Enterprises hearing held on 

March 12, 2003, covered the issue of portfolio transparency among 

mutual fund companies. 

Proxy Voting. Although the Committee took no direct oversight 

action on this topic, the Committee monitored the developments in 

this area throughout the 108th Congress. 

Securities Futures Products. Although the Committee took no direct oversight action on this topic, the Committee monitored the developments in this area throughout the 108th Congress. 

Retirement Plan Management. Although the Committee took no 

direct oversight action on this topic, the Committee monitored the 

developments in this area throughout the 108th Congress. 

Market Structure. On October 16, 2003, the Subcommittee on 

Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘Reviewing U.S. Capital Market 

Structure: The New York Stock Exchange and Related Issues’’ to 

examine the role of the New York Stock Exchange (NYSE) as a 

self-regulatory organization. On October 30, 2003, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘Reviewing U.S. Capital 

Market Structure: Promoting Competition in a Changing Trading 

Environment’’ which focused on promoting competition in the national market system. 

The Chairman of the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises sent a letter on February 10, 2004, to the Chairman of the SEC calling for the elimination of the trade-through rule. On February 20, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a field hearing entitled ‘‘Market Structure 

III: The Role of the Specialist in the Evolving Modern Marketplace’’

examining the role of specialists and their modern-day functions. 

On May 18, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing on 

Regulation NMS, the SEC’s proposed reform of market structure 

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entitled ‘‘The SEC Proposal on Market Structure: How will Investors Fare?’’ On May 24, 2004, the Chairman of the Subcommittee 

on Capital Markets, Insurance, and Government Sponsored Enterprises sent a letter to the Chairman of the SEC expressing his concerns that the NYSE was soliciting its member firms to oppose the 

SEC’s proposed Regulation NMS. He also sent a letter to the SEC 

Chairman on July 23, 2004, requesting information relating to 

market data fees and dissemination. This information was provided 

in September 2004. 

Investor Education and Literacy. Although the Committee took 

no direct oversight action on this topic, the Committee monitored 

the developments in this area throughout the 108th Congress. 

Analyst Conflicts. Although the Committee took no direct oversight action on this topic, the Committee monitored the developments in this area throughout the 108th Congress. 

Investment Banks and Accounting Fraud. Although the Committee took no direct oversight action on this topic, the Committee 

monitored the developments in this area throughout the 108th 

Congress. 

IPO Allocation. Although the Committee took no direct oversight 

action on this topic, the Committee monitored the developments in 

this area throughout the 108th Congress. 

Financial Markets and the 9/11 Terrorist Attacks. The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing on February 12, 2003, entitled 

‘‘Recovery and Renewal: Protecting the Capital Markets Against 

Terrorism Post–9/11,’’ to examine measures put in place since September 11, 2001, to protect the financial markets in case of a terrorist attack. These measures were further examined by the full 

Committee in its September 8, 2004, hearing entitled ‘‘Protecting 

our Financial Infrastructure: Preparation and Vigilance’’. 

Hedge Funds. The Subcommittee on Capital Markets, Insurance, 

and Government Sponsored Enterprises held a hearing on the regulatory issues and trading practices of hedge funds on May 22, 

2003, entitled ‘‘The Long and Short of Hedge Funds: Effects of 

Strategies for Managing Market Risk’’. In September 2003, the 

Committee staff received a briefing from the SEC on its staff report, ‘‘The Implications of the Growth of Hedge Funds,’’ released on 

September 29, 2003. 

Stock Option Accounting. The Subcommittee on Capital Markets, 

Insurance, and Government Sponsored Enterprises held two days 

of hearings April 21 and May 4, 2004, entitled ‘‘The FASB Stock 

Options Proposal: Its Effect on the U.S. Economy and Jobs.’’ That 

hearing focused on the economic impact of FASB’s stock option expensing proposal. 

The Committee’s oversight activities on this issue led to House 

passage of H.R. 3574, the Stock Option Accounting Reform Act, a 

bill requiring the expensing of stock options granted to the chief executive officer and the four other most highly compensated executives. The Chairman of the full Committee, the Chairman of the 

Subcommittee on Capital Markets, Insurance, and Government 

Sponsored Enterprises, and seven other members of the Congress 

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ing a delay in the implementation of FASB’s stock option expensing 

proposal. 

529 Plans. On February 4, 2004, the Chairman of the full Committee sent a letter to the Chairman of the SEC expressing concern 

about the excessive fees and lack of disclosure associated with 529 

state tuition savings plans. On June 2, 2004, the Subcommittee on 

Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing entitled ‘‘Investing in the Future: 529 State 

Tuition Plans.’’ On July 15, 2004, the Chairman of the full Committee sent another letter to the SEC Chairman recommending 

specific reforms relating to the costs and disclosure requirements 

of 529 plans. 

Abusive Financial Product Sales to Military Personnel. On September 9, 2004, the Subcommittee on Capital Markets, Insurance, 

and Government Sponsored Enterprises held a hearing on abusive 

sales of financial products, including contractual plans, to military 

personnel. On September 29, 2004, the Committee passed H.R. 

5011, the Military Personnel Financial Services Protection Act, a 

bill, which, among other things, prevents the future sales of contractual plans. The House passed H.R. 5011 on October 5, 2004. 

The Senate did not consider the bill before the end of the session. 

Subprime Lending. On June 14, 2004, the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises 

held a field hearing entitled ‘‘Broken Dreams in the Poconos: The 

Response of the Secondary Markets and Implications for Federal 

Legislation.’’ This hearing focused on the abuses present in the secondary mortgage market and subprime lending. 

SEC Hiring Authority. The Chairman of the full Committee and 

the Chairman of the Subcommittee on Capital Markets, Insurance, 

and Government Sponsored Enterprises sent letters to the Chairman of the SEC on January 8 and 30, 2003, requesting information 

relating to the hiring of SEC employees. The Committee’s oversight 

efforts on this issue led to the enactment of H.R. 658, the Accountant, Compliance, and Enforcement Staffing Act of 2003, (Public 

Law 108–44). 

GOVERNMENT SPONSORED ENTERPRISES

Federal Home Loan Bank System. The Committee monitored regulatory initiatives undertaken by the Federal Housing Finance 

Board (FHFB), including proposals to require the Federal Home 

Loan Banks to register the capital stock they sell with the SEC, 

under the Securities Exchange Act of 1934. On July 13, 2004, the 

Oversight and Investigations and the Capital Markets, Insurance, 

and Government Sponsored Enterprises Subcommittees held a joint 

hearing to examine the operations of the Office of Federal Housing 

Enterprise Oversight (OFHEO) and the Federal Housing Finance 

Board. 

GSEs and Financial Disclosure. In July 2002, Fannie Mae and 

Freddie Mac agreed to voluntarily register their common stock 

under the Securities Exchange Act of 1934. Registration under the 

Act triggers periodic disclosure requirements about the financial 

condition and management of companies that issue securities. 

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statement process through hearings and briefings. Fannie Mae registered with the SEC, but, in 2004, Fannie Mae failed to file its 

fourth quarter form 10Q with the SEC. The Committee will continue to ensure that both of the GSEs fulfill their agreements to 

register with the SEC and comply with relevant securities laws. 

OFHEO’s Risk-based Capital Standard. During the 108th Congress, the Committee reviewed the Risk-based Capital Stress Test 

results, OFHEO’s proposed changes to the Risk-based Capital Rule, 

OFHEO’s enforcement of the rule, and related safety and soundness issues, such as GSE interest rate risk management and duration gap in both public hearings and in staff briefings. 

GSE Regulatory Restructuring. In June 2003, Freddie Mac announced a major management reorganization following accounting 

irregularities at the GSE. This announcement led to investigations 

by the Committee and by the GSE regulator, OFHEO, into the 

causes of this reorganization. The Committee held hearings on the 

regulatory oversight of the GSEs on September 10 and 25, 2003. 

The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held hearings on OFHEO’s special examinations of Freddie Mac and Fannie Mae on January 21 and October 6, 2004. The majority of the Committee’s oversight has been 

focused on the accounting restatement of Freddie Mac, the special 

examinations by OFHEO, and proposals to reform the regulatory 

oversight of both Fannie Mae and Freddie Mac. 

The Committee has examined whether the existing GSE regulatory structure should be reformed, whether the supervisory and 

enforcement powers of GSE regulators should be strengthened, and 

whether funding for GSE regulators should be subject to the Congressional appropriations process. Chairman Baker introduced H.R. 

2575 on June 23, 2004. This legislation created a new GSE regulator with enhanced oversight powers. The Committee held several 

hearings on the GSE regulatory structure following the finding of 

accounting irregularities at both Fannie Mae and Freddie Mac, and 

will continue to consider regulatory restructuring proposals in the 

109th Congress. 

Affordable Housing Goals. In early 2004 it was discovered that the GSEs engaged in several transactions valued in excess of $1 

billion with several financial institutions designed to meet the 

GSEs’ affordable housing goals. Through these transactions the 

GSEs would pay the financial institutions a fee, or grant them 

some other privilege, in order to obtain the right to securitize qualified mortgages. The Committee and HUD engaged in a broad investigation into the details of these transactions and determined 

that there were no violations of the law; however, there was evidence of double counting of mortgages to reach the goals. HUD 

issued a rule during the 108th Congress raising the required level 

of affordable housing activity by the GSEs. The Committee closely 

monitored the process and rational behind this change in the affordable housing goals and will continue to do so in the 109th Congress. 

HOUSING ISSUES

Mortgage Finance Reform/Real Estate Settlement Procedures Act 

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tunity held a hearing on February 25, 2003, entitled ‘‘Simplifying 

the Home Buying Process: HUD’s Proposal to Reform RESPA.’’ On 

December 1, 2003, the Chairman of the full Committee sent a letter to the Department of Housing and Urban Development (HUD) 

regarding the RESPA proposed rule and requested that any rewritten or amended proposal be published as a proposed rule in the 

Federal Register to provide an opportunity for further public comment. In late December 2003, HUD sent its final RESPA rule to 

OMB for review. On March 22, 2004, the Acting Secretary of Housing and Urban Development withdrew the final rule and indicated 

plans to revise and reissue the rule. 

Annual Budget Review of Housing and Urban Development, 

Rural Housing Service, National Reinvestment Corporation and the 

National Flood Insurance Program. The Administration proposed $31.3 billion in FY 2004 budget authority for HUD. During the review of the FY 2004 budget proposal, the full Committee held a 

hearing on March 5, 2003, to review housing and related programs 

under its jurisdiction, which include those programs at HUD, the 

National Flood Insurance Program, the Rural Housing Service and 

the Neighborhood Reinvestment Corporation. 

On February 2, 2004, the Administration presented its proposed FY 2005 budget to Congress, requesting $31.5 billion for HUD, 

which is approximately one percent above the $31.2 billion enacted 

for FY 2004. On May 20, 2004, the Subcommittee on Housing and 

Community Opportunity held a hearing to examine the HUD FY 

2005 budget proposal and received testimony from the Secretary of 

Housing and Urban Development. 

Federal Housing Administration. In addition to the general oversight hearings on HUD and its proposed budgets for FY 2004 and 

2005, the Subcommittee on Housing and Community Opportunity 

examined a number of oversight issues in the context of its legislative hearings on bills addressing the operation of the FHA. 

During the 108th Congress, the Chairman of the Subcommittee 

on Housing and Community Opportunity requested five GAO studies on issues related to the FHA. These studies and requested 

dates are October 21, 2003, concerning the performance of FHA 

and other loans that involve down payment assistance, October 21, 

2003, concerning the loan commitment authorities of FHA and the 

Rural Housing Service, September 8, 2004, concerning FHA’s 

TOTAL Scorecard, and September 22, 2004, concerning credit subsidy reestimates and actuarial soundness of HUD’s Mutual Mortgage Insurance Fund. 

HUD Management Reform and Staffing. The Committee reviewed issues related to HUD’s management and staffing through 

the annual review of the proposed budgets for FY 2004 and FY 

2005. Those hearings were held on March 5, 2003, and May 20, 

2004, respectively. 

HOPE VI. The Subcommittee on Housing and Community Opportunity held a hearing, entitled ‘‘Strengthening and Rejuvenating 

our Nation’s Communities and the HOPE VI Program,’’ on April 

29, 2003. This hearing resulted in the enactment of legislation extending the HOPE VI authorization through 2006 and reforming 

the program, which was incorporated into S. 811, the American 

Dream Downpayment Act (Public Law 108–186). As a result of the 

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hearings, the program’s authorization was extend through 2006 

with changes in the program structure to allow smaller communities, without Public Housing Authorities, to use HOPE VI grants 

to leverage other private and public sector funds to rehabilitate 

small, rural downtown areas for affordable housing. 

HUD Related Authorizations. The full Committee and Subcommittee on Housing and Community Opportunity reviewed HUD 

programs and related authorizations through the annual review of 

the proposed budgets for FY 2004 and 2005, on March 5, 2003, and 

May 20, 2004, respectfully. 

Section 8. The Subcommittee held five hearings related specifically to the Housing Choice Voucher Program, commonly referred 

as the section 8 rental assistance program or Federal rental assistance program. Those hearings were held on May 22, June 10, June 

17, July 1, and July 29, 2003. Moreover, the Committee addressed 

these issues with the Secretary of Housing and Urban Development 

at the annual budget hearings held on March 5, 2003, and May 20, 

2004. 

In addition to the oversight hearings on the status of the Housing Choice Voucher Program, the Chairman of the Subcommittee 

on Housing and Community Opportunity requested two GAO studies regarding the operation of the program. The first, requested on 

October 21, 2003, concerned errors and overpayments in HUD’s 

rental assistance program. The second study, requested on June 2, 

2004, concerned late Housing Assistance Payments made by HUD. 

Minorities and Homeownership. While neither the full Committee 

nor the Subcommittee on Housing and Opportunity held specific 

hearings on minorities and homeownership, the full Committee and 

Subcommittee covered these issues in the context of other hearings. 

Specifically, the February 25, 2003, hearing entitled ‘‘Simplifying 

the Home Buying Process: HUD’s Proposal to Reform RESPA,’’ the 

March 25 and April 28, 2003, hearings on faith-based housing programs, the April 29, 2003, hearing on HOPE VI programs, the 

June 19, 2003, hearing entitled ‘‘Rural Housing in America,’’ the 

June 30, 2003, hearing entitled ‘‘Community Development Block 

Grants: The Impact of CDBG on our Communities,’’ the May 5, 

2004, hearing on Native American housing programs, and the 

March 18, 2004, hearing on housing counseling programs. Also, the 

Subcommittee on Housing and Community Opportunity held joint 

hearings on subprime lending with the Subcommittee on Financial 

Institutions and Consumer Credit on March 30, and June 23, 2004. 

National Flood Insurance Program. The Subcommittee held an 

oversight hearing on April 1, 2003, entitled ‘‘The National Flood Insurance Program: Review and Reauthorization’’ which addressed 

the National Flood Insurance Program reauthorization and any 

suggested reforms. The Committee’s activities on this issue resulted in the enactment of S. 2238, the Bunning-BereuterBlumenauer Flood Insurance Reform Act of 2004 (Public Law 108–

264). 

Rural Housing Service Multifamily Program/Rural Housing Prepayment. On June 19 and July 8, 2003, the Subcommittee on Housing and Community Opportunity held two days of hearings entitled 

‘‘Rural Housing in America.’’ These hearings began an extensive review of the various rural housing programs under the RHS to deVerDate jul 14 2003 02:56 Jan 11, 2005 Jkt 039006 PO 00000 Frm 00174 Fmt 6601 Sfmt 6602 E:\HR\OC\HR802.XXX HR802
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termine what changes, if any, were necessary to make the programs more efficient, cost effective and better able to meet the 

needs of low- and moderate-income families in rural areas. 

As a follow-up to hearings held by the Committee in 2003, the 

Chairman of the Subcommittee on Housing and Community Opportunity requested several GAO studies regarding housing programs 

under the RHS’ jurisdiction. These studies and requested dates are 

June 25, 2003, concerning the Rural Housing Service’s Section 521 

rental assistance program (‘‘Rural Housing Service: Agency has 

Overestimated Its Rental Assistance Budget Needs over the Life of 

the Program.’’ May 20, 2004. GAO–04–752.), October 21, 2003, concerning information on the loan commitment authority of the Rural 

Housing Service, and November 17, 2003, concerning how the 

Rural Housing Service defines eligible (rural) service areas (‘‘Rural 

Housing: Changing the Definition of Rural Could Improve Eligibility Determinations.’’ December 1, 2004). 

Community Development Block Grants. The Committee on Financial Services held a hearing on March 5, 2003, to review housing 

programs under its jurisdiction, including the Community Development Block Grant program at HUD. In addition, on May 20, 2004, 

the Subcommittee on Housing and Community Opportunity held a 

hearing to examine the HUD FY 2005 budget proposal. The Subcommittee heard testimony from the Secretary of Housing and 

Urban Development. 

On June 30, 2003, the Subcommittee on Housing and Community Opportunity held a field hearing entitled ‘‘Community Development Block Grants: The Impact of CDBG on Our Communities.’’ The hearing focused on the history of the program, including the 

timely expenditure of CDBG funds and management and operation 

of the program. 

Oversight of the Housing Authority of New Orleans and the Puerto Rico Public Housing Authority. The Committee and Subcommittee continued its review of the Housing Authority of New 

Orleans (HANO) to determine if HUD administrative receivership 

has lead to significant improvement in both HUD’s and HANO’s 

management and operation. During its HUD budget/oversight 

hearings on March 5, 2003, and May 20, 2004, the Committee also 

reviewed the measures taken by HUD to correct abuse in contracting and program management within all public housing authorities, including the Puerto Rico Housing Authority, the secondlargest public housing authority in the country. 

Oversight of HUD and Rural Housing Service Financial and Information Systems. On October 21, 2003, the Committee requested 

a GAO evaluation of RHS and HUD Federal Housing Administration system for estimating utilization of commitment authority and, 

in the case of programs requiring credit subsidy, credit subsidy authority. The lack of timely comprehensive information continues to 

hamper both HUD and RHS’ ability to monitor the progress of programs and the use of its funds. The Committee used its two HUD 

oversight/budget hearings and the rural housing hearings to investigate how best to address this crucial problem. 

Oversight of HUD’s Public Housing Assessment System. While 

the Committee did not focus a specific hearing on the topic of 

HUD’s Public Housing Assessment System (PHAS), it held several 

170

related hearings that touched on this issue. During its two HUD 

oversight/budget hearings for FY 2004 and FY 2005, the Committee realized HUD has yet to use new technology to streamline 

its many programs within the office of Public and Indian Housing, 

including PHAS. 

Faith-based Housing Initiatives. The Subcommittee on Housing 

and Community Opportunity held two days of hearings on March 

25 and April 28, 2003, entitled ‘‘Strengthening America’s Communities: Examining the Impact of Faith-Based Housing Partnerships’’. The focus of that hearing was the potential impact of HUD’s 

proposed rule that incorporates Executive Order No. 13279, issued 

on December 12, 2003, into eight Community Planning and Development programs. 

On January 6, 2003, the Department of Housing and Urban Development (HUD) issued proposed regulations designed to further 

enhance the participation of faith-based organizations in certain 

HUD programs. (‘‘Participation in HUD Programs by Faith Based 

Organizations: Providing for Equal Treatment of All HUD Program 

Participants; Proposed Rule,’’ 68 Federal Register 648, January 6, 

2003.) The proposed HUD regulations address participation by 

faith-based organizations in eight programs: Housing for Persons 

with AIDS (HOPWA), Emergency Shelter Grant (ESG) Program, 

Supportive Housing Program (SHP), Shelter Plus Care (S+C) program, Youthbuild program, HOPE 3, HOME, and CDBG. The hearings provided an opportunity for representatives of various organizations to testify on the impact of the proposed rule. 

Homelessness. The Financial Services committee held a hearing 

to review the HUD FY 2004 Proposed Budget on March 5, 2003, 

and the Subcommittee on Housing and Community Opportunity 

held a hearing to review HUD’s FY 2005 Proposed Budget on May 

20, 2004. As part of those hearings the Committee reviewed programs and funding levels specific to homelessness. 

Housing Production. The Subcommittee on Housing and Community Opportunity held a series of hearings entitled ‘‘The Section 8 

Housing Assistance Program: Promoting Decent Affordable Housing for Families and Individuals that Rent’’ during the first session 

of the 108th Congress. In all, the Subcommittee held five hearings, 

three in Washington on May 22, June 10 and June 19, 2003, and 

two field hearings, Los Angeles, California on July 1, 2003, and Columbus, Ohio, on July 29, 2003.

On June 19 and July 8, 2003, the Subcommittee on Housing and 

Community Opportunity held hearings entitled ‘‘Rural Housing in 

America.’’ These hearings looked at the specific housing needs of 

those leaving in rural communities. 

On May 5, 2004, the Subcommittee traveled to Tuba City, Arizona, to investigate the housing needs of Native Americans and the 

challenges specific to producing affordable housing for those living 

on the Navajo Reservation. 

Housing Preservation. On December 10, 2002, Chairman Oxley 

and Ranking Minority Member Frank asked the GAO to study the 

preservation of low-income housing rental development before they 

reach mortgage maturity. On July 20, 2004, the Subcommittee on 

Housing and Community held a hearing on the GAO report entitled ‘‘Multifamily Housing: More Accessible HUD Data Could Help 

171

Efforts to Preserve Housing for Low-Income Tenants’’ (GAO–04–20; 

January 2004). 

Fraud in the Housing Industry. On February 25, 2003, the Committee held a hearing on reform of the Real Estate Settlement Procedures Act (RESPA). Many of the provisions included in RESPA 

are designed to prevent fraud within the mortgage industry. The 

Subcommittees on Housing and Community Opportunity and Financial Institutions and Consumer Credit held three joint hearings 

on issues related to the topic of predatory lending. 

The first joint hearing was held on November 5, 2003, and was 

entitled ‘‘Protecting Homeowners: Preventing Abusive Lending 

While Preserving Access to Credit.’’ The hearing focused on the 

subprime mortgage lending industry in the United States. In particular, the subcommittees were interested in solutions which 

would eliminate abusive practices in the origination process and in 

the secondary market while, at the same time, preserving and promoting access to affordable credit. 

The second hearing was held on March 30, 2004, and was entitled, ‘‘Subprime Lending: Defining the Market and Its Customers.’’

The focus of this particular hearing was on the growing subprime 

mortgage lending industry in the United States. This hearing focused on exploring the dynamics of the subprime market and its 

ability to offer more customized mortgage products to meet customers’ varying credit needs. In addition, this hearing helped the 

Subcommittees seek a better definition of the typical subprime customer and the advantages and disadvantages this market poses to 

the financial security of these consumers. Panelists consisted of industry groups, consumer groups, and a host of leading academics 

in the field. 

The third hearing was held June 23, 2004, and was entitled ‘‘Promoting Homeownership by Ensuring Liquidity in the Subprime 

Mortgage Market.’’ This hearing focused on the role that the secondary mortgage market plays in providing liquidity to the sub 

prime industry and creating homeownership opportunities for 

American consumers. 

In addition to the hearings pertaining to predatory lending and 

the subprime market, on October 7, 2004, the Subcommittee on 

Housing and Community Opportunity held a hearing entitled, 

‘‘Mortgage Fraud and its Impact on Mortgage Lenders.’’ The focus 

of the hearing was on mortgage fraud and its impact on the lender 

and ultimately the market and was in response to a specific investigation conducted by the Federal Bureau of Investigation (FBI). 

On September 17, 2004, the FBI announced action against 205 

individuals in the largest nationwide operation in FBI history directed at organized groups and individuals engaged in mortgage 

fraud. Called ‘‘Operation Continued Action’’, the FBI targeted a variety of fraud schemes, including mortgage and loan fraud as well 

as insider fraud, financial institution failure investigations, identity 

theft, check fraud and check kiting in 37 states nationwide with 

more than 533 cases of mortgage fraud in 2004 alone. This represents a five-fold increase in the number investigated from three 

years earlier. 

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ECONOMIC DEVELOPMENT

Development of Economic Opportunities. With the assistance of 

the GAO, the Committee on Financial Services periodically reviewed the Rural Local Broadcast Signal Loan Guarantee Program. 

While the Committee took no direct oversight action, it also monitored activities of the Appalachian Regional Commission and the 

Delta Regional Authority. 

Reauthorization of the Defense Production Act. The Committee 

reviewed the operations of the Defense Production Act in the context of its reauthorization of the program. These efforts led to enactment of S. 1680, the Defense Production Act Reauthorization of 

2003, (Public Law 108–195). 

Community Development Financial Institutions. Although the 

Committee took no direct oversight action on this topic, the Committee monitored the developments in this area throughout the 

108th Congress. 

FEDERAL AGENCIES/AGENCY PROGRAM ISSUES

Management/Reform of the Federal Reserve System. On February 

12, April 30, July 15, 2003, and February 11 and July 21, 2004, 

the Committee on Financial Services held wide-ranging hearings 

covering many aspects of the operation of the Federal Reserve system and the monetary policy activities of its Board of Governors. 

On April 28, 2004, the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology held a hearing 

entitled ‘‘Money Matters: Helping America Move Forward.’’ That 

hearing covered issues related to the Federal Reserve’s issuance of 

currency, the design of that currency, and the Federal Reserve’s 

role in circulation of currency and of coins issued by the Treasury 

Department throughout the country for use in ordinary commerce. 

Federal Reserve Conduct of Monetary Policy. On February 12, 

April 30, July 15, 2003, and February 11 and July 21, 2004, the 

Committee on Financial Services held hearings to receive the testimony of the Chairman of the Board of Governors of the Federal Reserve System, covering the conduct of monetary policy and the 

state of the economy. 

Oversight of Agency Management Practices. The full Committee 

on Financial Services held a hearing on June 16, 2004, entitled 

‘‘Oversight of the Department of the Treasury.’’

Economic Security. The Subcommittee on Oversight and Investigations held a hearing on October 20, 2003, (discussed previously 

under ‘‘Cybersecurity’’) to examine government and industry efforts 

to protect the financial markets during times of stress, including 

blackouts, natural disasters or terrorist attacks. The hearing focused on a Committee-requested GAO report covering the resilience 

of the nation’s critical financial infrastructure to withstand such 

trauma. Further, the full Committee on Financial Services held a 

hearing on September 8, 2004, focusing on the resilience and preparedness of the financial markets, which also served as a followup to track compliance with recommendations in the GAO report. 

On October 8, 2004, the House of Representatives, as part of consideration of H.R. 10, the 9/11 Recommendations Implementation 

Act, passed language originating in the Committee on Financial 

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Services calling for reports on efforts to strengthen the resilience 

of the nation’s critical financial infrastructure, and urging greater 

efforts to create regional public-private partnerships to protect that 

infrastructure. 

COINS, CURRENCY AND PAYMENT SYSTEMS

Management of the Nation’s Money: Activities of the Bureau of 

Engraving and Printing and the Bureau of the Mint. The Subcommittee on Domestic and International Monetary Policy, Trade, 

and Technology held a hearing entitled ‘‘Money Matters: Helping 

America Move Forward’’ on April 28, 2004, to discuss the design of 

the nation’s circulating coins and currency, trends in counterfeiting 

and issues dealing with the circulation of coins and currency in ordinary commerce. Also discussed were issues dealing with the operation of the Bureau of Engraving and Printing and the Bureau of 

the Mint. The Chairman and Ranking Member of the Subcommittee on Domestic and International Monetary Policy, Trade, 

and Technology have outstanding requests for reports from the 

Government Accountability Office: an update of a 1998 GAO report 

recommending that the Bureau of Engraving and Printing seek at 

least one more supplier for currency paper, in advance of the letting of new contracts in 2006, and from the Treasury Office of Inspector General on the advisability of the Bureau of the Mint seeking to transfer the production of the ‘‘blanks’’ used in coin production to the private sector. 

Electronic Commerce and Payment Systems. On October 1, 2003, 

the Full Committee on Financial Services held a hearing entitled 

‘‘Remittances: Reducing Costs, Increasing Competition and Broadening Access to the Market,’’ aimed at allowing U.S. residents to 

more efficiently send money home to family members in other 

countries. 

Counterfeiting. The Subcommittee on Domestic and International 

Monetary Policy, Trade, and Technology held a hearing on April 

28, 2004, on the design and security of circulating coins and currency. 

Dollar Coin. The Subcommittee on Domestic and International 

Monetary Policy, Trade, and Technology held a hearing on April 

28, 2004, examining the design and circulation patterns of the onedollar coin. That hearing resulted in Committee consideration of 

H.R. 3916, the Presidential $1 Coin Act, a bill which redesigned 

the one-dollar coin, giving it a design that changed quarterly to interest collectors and stimulate circulation for use in ordinary commerce similar to the 50 State quarter program. 

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