49–006 

109TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 109–282 

HURRICANES RITA AND WILMA FINANCIAL SERVICES 

RELIEF ACT OF 2005 

NOVEMBER 10, 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 

[To accompany H.R. 4146] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 4146) to facilitate recovery from the effects of Hurricane 

Rita and Hurricane Wilma by providing greater flexibility for, and 

temporary waivers of certain requirements and fees imposed on, 

depository institutions, credit unions, and Federal regulatory agencies, and for other purposes, having considered the same, report favorably thereon without amendment and recommend that the bill 

do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for Legislation .................................................................... 2 

Hearings ................................................................................................................... 3 

Committee Consideration ........................................................................................ 4 

Committee Votes ...................................................................................................... 4 

Committee Oversight Findings ............................................................................... 4 

Performance Goals and Objectives ......................................................................... 4 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 4 

Committee Cost Estimate ....................................................................................... 5 

Congressional Budget Office Estimate ................................................................... 5 

Federal Mandates Statement ................................................................................. 6 

Advisory Committee Statement .............................................................................. 6 

Constitutional Authority Statement ...................................................................... 6 

Applicability to Legislative Branch ........................................................................ 6 

Section-by-Section Analysis of the Legislation ...................................................... 6 

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PURPOSE AND SUMMARY

H.R. 4146—Hurricanes Rita and Wilma Financial Services Relief 

Act of 2005 

H.R. 4146 ensures that existing law governing the regulation of 

insured depository institutions and insured credit unions does not 

further complicate the recovery from the damage caused by Hurricanes Rita and Wilma. The legislation provides three key points of 

short-term and measured regulatory relief to facilitate the stabilization of the financial services industry in the disaster declared 

areas: 

Capital and Net Worth Flexibility.—H.R. 4146 authorizes federal 

financial regulators to offer flexibility from prompt corrective action 

under limited circumstances if the regulator determines an institution, if provided such flexibility, can successfully execute a capital 

or net worth recovery plan in a manner consistent with safe and 

sound regulation. 

Short-term Increase in Deposits and Assets.—H.R. 4146 authorizes federal financial regulators to offer flexibility from leverage 

limit and reserve requirements if an institution experiences a 

short-term significant increase in deposits due to the payment of 

customer insurance claims or federal disaster benefits. The institution is only granted such flexibility if the regulator approves the institution’s plan to accommodate the short-term increase in its assets and deposits that is consistent with safe and sound regulation. 

Waiver of Federal Reserve Wire Transfer Fees.—H.R. 4146 requires the Federal Reserve System to waive, for a period of 180 

days from the date the major disasters were declared for Hurricanes Rita and Wilma. One 30-day discretionary extension is provided. Federal financial regulators have strongly encouraged all financial institutions to waive most fees associated with the cost of 

business; including any wire transfer service charge a financial institution may assess its customers. By waiving Federal Reserve 

wire transfer fees for 180 days, H.R. 4146 ensures financial institutions already under duress are not forced to continue a needed 

service at a loss. 

BACKGROUND AND NEED FOR LEGISLATION

In early September 2005, the House Financial Services Committee held a briefing for members by the financial services industry and Federal financial regulators in the aftermath of Hurricane 

Katrina to provide an outline of relief efforts. The Committee also 

held two hearings in response to Hurricane Katrina in September 

2005. The Financial Institutions and Consumer Credit Subcommittee held a hearing on September 14, 2005, that focused on 

the financial services response to Hurricane Katrina and regulatory 

and legislative relief recommendations to facilitate their efforts. 

The Housing and Community Opportunity Subcommittee held a 

hearing on September 15, 2005, that focused on the industry’s relief efforts to provide for critical housing needs in the aftermath of 

Hurricane Katrina. Many recommendations were provided to the 

Committee at these hearings and H.R. 4146 addresses some of 

these hurricane relief suggestions. 

After Hurricane Katrina, Hurricanes Rita and Wilma continued 

to wreak havoc in the Gulf States. This devastation has signifiVerDate Aug 31 2005 06:41 Nov 11, 2005 Jkt 049006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR282.XXX HR282
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cantly harmed the regional economy by dislocating homeowners, 

businesses and financial institutions. The area’s economic recovery 

will require long-term efforts, which will require local lenders to be 

present to meet the liquidity needs of borrowers affected by these 

hurricanes. 

This bill is similar to H.R. 3945, the Hurricane Katrina Financial 

Services Relief Act of 2005, which passed the House on October 27, 

2005, under suspension of the rules by a vote of 411–0. 

HEARINGS

The Subcommittee on Financial Institutions and Consumer Credit held a hearing on September 14, 2005, on ‘‘Hurricane Katrina: 

The Financial Institutions’ Response.’’ The following witnesses testified: 

Mr. McKinley W. ‘‘Mac’’ Deaver, Executive Director, Mississippi Bankers Association, representing American Bankers 

Association; 

Mr. Ken Bordelon, President and CEO, E Federal Credit 

Union (LA), representing National Association of Federal Credit Unions; 

Mr. C. R. ‘‘Rusty’’ Cloutier, President and CEO, MidSouth 

Bank, N.A. (LA), representing Independent Community Bankers of America; 

Mr. Charles Elliott, President and CEO, Mississippi Credit 

Union Association, representing Credit Union National Association; 

Ms. Diane Casey-Landry, President and CEO, America’s 

Community Bankers; 

Mr. David Gibbons, Senior Executive Vice President and 

Chief Risk Officer, HSBC North America (IL), representing 

American Financial Services Association; and 

Mr. Hilary Shelton, Director, Washington Bureau, NAACP. 

The Subcommittee on Housing and Community Opportunity held 

a hearing on September 15, 2005, on ‘‘Emergency Housing Needs 

in the Aftermath of Hurricane Katrina.’’ The following witnesses 

testified: 

Mr. Henry A. Alvarez III, President and CEO, San Antonio 

Housing Authority, San Antonio, TX, testifying on behalf of 

National Association of Housing and Redevelopment Officials; 

Ms. Sharon M. Daly, Senior Advisor for Public Policy, Catholic Charities USA; 

Ms. J. K. Huey, Senior Vice President, IndyMac Bank, Pasadena, CA, testifying of behalf of the Mortgage Bankers Association; 

Ms. Kay Miller, President, T.A. Miller, Inc. and Tra-Dor, 

Inc.; Management, Shreveport, LA, testifying on behalf of the 

Council for Affordable and Rural Housing; 

Mr. David A. Roberson, President and CEO, Cavalier Homes, 

Inc., Addison, AL, testifying on behalf of Manufactured Housing Institute and the Manufactured Housing Association for 

Regulatory Reform; 

Ms. Nan P. Roman, President, National Alliance to End 

Homelessness; 

Ms. Barbara Thompson, Executive Director, National Council of State Housing Agencies; 

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Mr. David F. Wilson, Homebuilder, Ketchum, ID, President, 

National Association of Home Builders; 

Mr. Clanton Beamon, Executive Director, Delta Housing Development Corporation, Indianola, MS, testifying on behalf of 

the National Rural Housing Coalition; 

Mr. Jeffrey I. Brodsky, President, Related Management 

Company, LLC, New York City, NY, testifying on behalf of the 

National Multi Housing Council and National Leased Housing 

Association; 

Ms. Judith A. Kennedy, President and CEO, National Association of Affordable Housing Lenders; 

Ms. Michelle Norris, Senior Vice President of Development, 

National Church Residences, testifying on behalf of the American Association of Homes and Services for the Aging; 

Ms. Ellen Lee, Deputy Executive Assistant for Neighborhood 

Development, City of New Orleans, LA, testifying on behalf of 

the National Community Development Association (submitted 

for the record); and 

National Association of Realtors (submitted for the record). 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on October 27, 2005, and ordered reported H.R. 4146, Hurricanes Rita 

and Wilma Financial Services Relief Act of 2005, favorably reported to the House by voice vote. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. No record votes were 

taken with in conjunction with the consideration of this legislation. 

No amendments were considered. A motion by Mr. Oxley to report 

the bill to the House with a favorable recommendation was agreed 

to by a voice vote. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee previously held hearings and 

made findings that are reflected in this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee establishes the following performance related goals and objectives for this legislation: 

The temporary waivers of certain regulatory requirements and 

fees imposed on depository institutions and credit unions will facilitate recovery from the effects of Hurricanes Rita and Wilma. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

5 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

NOVEMBER 9, 2005. 

Hon. MICHAEL G. OXLEY, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4146, the Hurricanes Rita 

and Wilma Financial Services Relief Act of 2005. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Barbara Edwards (for 

federal revenues and Kathleen Gramp (for federal costs). 

Sincerely, 

DOUGLAS HOLTZ-EAKIN. 

Enclosure. 

H.R. 4146—Hurricanes Rita and Wilma Financial Services Relief 

Act of 2005 

H.R. 4146 would provide certain forms of relief to financial institutions whose deposits are largely derived from residents and businesses located in areas designated as disaster areas after Hurricanes Rita and Wilma. It would direct the Federal Reserve to waive 

or rebate transaction fees for wire transfer services that otherwise 

would be due from eligible institutions. The waiver would be in effect for at least 180 days after enactment; it could be extended for 

an additional 30 days by an action of the Board of Governors of the 

Federal Reserve System. Other provisions in the bill would authorize the Federal Deposit Insurance Corporation (FDIC) and National 

Credit Union Administration (NCUA) to temporarily use different 

criteria when evaluating the financial condition of institutions in 

those disaster areas if doing so would facilitate their recovery and 

be consistent with safe and sound practices. 

Based on information from the Federal Reserve, CBO estimates 

that enacting this bill would reduce federal revenues by $2 million 

in fiscal year 2006. The Federal Reserve remits its net income to 

the Treasury, and those payments are classified as governmental 

receipts, or revenues, in the federal budget. Any additional income 

or costs to the Federal Reserve, therefore, can affect revenues. In 

this instance, CBO estimates that waiving fees for wire services for 

eligible institutions would reduce the Federal Reserve’s profits by 

about $2 million, reducing federal revenues by a corresponding 

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amount. CBO estimates that enacting this bill would have no significant effect on direct spending by the FDIC or the NCUA. 

H.R. 4146 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

not affect the budgets of state, local, or tribal governments. 

The CBO staff contacts for this estimate are Barbara Edwards 

(for federal revenues) and Kathleen Gramp (for federal costs). This 

estimate was approved by G. Thomas Woodward, Assistant Director for Tax Analysis, and Robert A. Sunshine, Assistant Director 

for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional 

Authority of Congress to enact this legislation is provided by Article 1, section 8, clause 1 (relating to the general welfare of the 

United States) and clause 3 (relating to the power to regulate interstate commerce). 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This section establishes the short title of the bill, the ‘‘Hurricanes 

Rita and Wilma Financial Services Relief Act of 2005.’’ 

Section 2. Definitions 

This section establishes definitions for the terms appropriate federal banking agency, insured depository institution, insured credit 

union and qualified disaster area. 

Section 3. Sense of the Congress on cashing of government checks 

This section expresses the sense of the Congress that financial 

institutions continue to provide financial services to victims of Hurricanes Rita and Wilma and encourages the Secretary of the Treasury and the Federal financial regulators to educate insured depository institutions and insured credit unions on the application of the 

guidance the Treasury Department published in the Federal Register. 

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Section 4. Waiver of Federal Reserve Board fees for certain services 

This section waives fees charged by the Board of Governors to affected financial institutions for wire transfer services. 

Section 5. Flexibility in capital and net worth standards for affected 

institutions 

This section allows federal financial regulators to waive prompt 

corrective action requirements for affected financial institutions if 

(1) the institution derives more than 50 percent of its total deposits 

from within the disaster area, (2) the institution was at least adequately capitalized prior to the date of disaster, (3) the reduction 

in capital or net worth is the direct result of the disaster, and (4) 

the waiver would facilitate the institution’s recovery in a safe and 

sound manner. The section has an 18-month effective date. 

Section 6. Deposit of insurance proceeds 

This section authorizes federal financial regulators to allow financial institutions to subtract from their total assets the amount 

equal to insurance and government payments deposited in the institution when determining leverage limits. The waiver authority 

applies to those institutions where (1) the institution derives more 

than 50 percent of its deposits within the disaster area, (2) the institution was at least adequately capitalized prior to the disaster, 

and (3) the institution has an acceptable plan to manage the increase in its assets and deposits. The section has an 18-month effective date. 

Section 7. Effective period 

The provisions of the Act, except Section 3(2), Section 5(a), and 

Section 6(a), are effective for a period of 180 days, beginning on the 

date of enactment. One 30-day extension may be granted by the 

Federal Reserve with respect to Section 4. 

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