Date: 1984-03-21
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. the dispensing of financial services on a reasonable and equitable basis should be the goal of all depository institutions. whether chartered by the Federal Government or State governments. New York State has taken the lead in trying to establish a rational criteria for the clearing of checks and to assure that consumers have access to their funds as soon as possible. The State is trying to eliminate the long delayssometimes running into weekswhich have frustrated consumers throughout the Nation. Mr. Speaker. once again the Federal financial supervisory system is running laps behind in protecting the American consumer. The New York Times reports today that the Federal Home Loan Bank Board. acting through its General Counsel. has informed the federally chartered thrifts in that State they need not comply with a new State law designed to give consumers quicker access to their deposits. The FHLBB points to the ageold preemption iaf Federal law for institutions chartered by the Federal Government. Mr. Speaker. I do not argue with this principle of law. but I do question why the Federal Home Loan Bank Board. and other Federal supervisors. have not led the way in eliminating or reducing the onerousthe outlandishly longdelay required before most checks are cleared and credited to a customers account. In some cases. the delaystechnically the floatstretch into weeks. A frustrating experience. and at times an experience that results in severe problems for consumers. particularly low and middle income families who do not have the luxury of waiting weeks for their money. While the depository institutions hold the deposit uncredited. the customer writes checksmany of which get marked "insufficient funds" and socked with a $10. $15. $20 fee. All the while the financial institution refuses to post the deposit. which is often hundreds of dollars in excess of the insufficient fund items. On the one hand. the institution has use uf the "float"-a proficient itemand at the same time collects a little extra in the form of returned check fees from the customer. An allwin solution for the institutions. a sure loser for the customer. Mr. Speaker. over the years I have tried repeatedly to call attention to this problem in hopes that we would see some action by the supervisory agencies in support of the consumer. The Federal Reserve. in a meeting last month. did come up with a draft letter addreh ing some aspects of the case and making some attempt to coordinate an approach with the other agencies. While I welcome the Federal Reserves limited response to my efforts. it is simply not enough. New York State has moved in a definitive fashion to reduce the delay in availability of funds. and the only answer from the Federal agencies has been to trot out the preemption issue. Mr. Speaker. again I acknowledge the legal scholarship. but I deplore the lack of creativity. the lack of action. the lack of concern which could make the preemption issue moot in this instance. Mr. Speaker. it is my intention to hold hearings on April 4 and 5 to determine means by which the consumer can get early access to his funds whether he happens to bank at a federally chartered or a State chartered insitution. It Is my intention to draft legislation which will give the consumers relief and which give the Federal supervisory agencies specific instructions on the availability of funds. Once again. we are forced to provide a wake up call for the Rip Van Winkles of the financial supervisory system.