Date: 1986-10-07
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. I yield myself such time as I may consume. Mr. Speaker. H.R. 5576the Banking Stability. Housing Improvement and Consumer Protection Act of 1986is an omnibus package of "must" legislationmust legislation for the consumer. musts for financial regulators and the Federal insurance funds. and musts for housing programs and community development efforts nationwide. If the Congress fails to enact H.R. 5576 it invites chaos among the Nations system of depository institutions. a loss of confidence across a wide spectrum of the American public. and potentially heavy drains on Federal insurance funds and the ultimate prospect of direct appropriations to replenish these funds. If the Congress fails to enact H.R. 5576 it would shut down federally assisted housing programs administered by both the Department of Housing and Urban Development and the Farmers Home Administration. Everything from FRA insurance to programs for the elderly. housing to community development block grants. the urban development action grant (UDAGI. and Housing Development Action Grant Program IHODAG] projects would be halted along with crime and flood insurance. If Congress fails to enact H.R. 5576 it would abandon a commitment to begin to provide relief for the American consumer who has been hit with a myriad of new fees and unfair practices instituted by banks and other financial institutions. The bill would prevent banks from holding customers checks and would require that the customer be given access to the deposited funds in a timely fashion. Under the present system. banks hold checks for inordinate periods of timesome times 2 to 3 weeks. even a monthand profit from the float before giving the customer access to his or her money. In the meantime. the customer is socked with huge bounced check fees even though a bonafide deposit has been made. In other cases. the banks hold the checks. fail to credit the amount to the customers account and. thus. force the customer into an overline or overdraft line of credit at a high interest rate. Both the check hold bill and the housing bill have previously passed the House. The check hold bill on a vote of 282 to 11 on January 23. 1986. the housing bill on a 340 to 36 vote on June 12. 1986. The Senate has failed to act and we have included these measures in H.R. 5576 in an effort to place these must Items before the Senate again. Titles I and II of the bill provide important new tools and funds for the Federal Deposit Insurance Corporation and the Federal Savings and Loan Insurance Corporation. The bill provides for the recapitalization of FSLIC which insures approximately $800 billion in deposits in over 3.000 savings and loan institutions. The recap plan is an industry selfhelp effort and involves no taxpayer monies. The problems of FSLIC are well known. The FSLIC is trying to close or sell about 130 sick savings and loans with assets totaling $47.6 billion. FSLICs reserves could fall to as low as $1 billion by the end of this year. The recapitalization plan is expected to raise between$12 and $15 billion for FSLIC on a longterm basis. Title II contains the socalled regulators bill which broadens the powers of the Federal banking agencies to deal with troubled commercial banks. The bill would expand the regulators authority to merge failed banks interstate to include -the authority to arrange such mergers for banks that are in danger of closing. as well as for those that have already been closed. The Federal Deposit Insurance Corpo.ration has already dealt with over 100 bank failures this year and is anticipating as many as 160 failures for the year as a whole. The authority -contained in title II is essential if the FDICs .costs are to be minimized and the insurance fund protected. Mr. Speaker. H.R. 5576 passed the Banking. Finance and Urban Affairs Committee on a 47 to 1 vote. it should be passed by the House today by an overwhelming margin so that we can move this to the Senate with .reasonable prospects for enactment before the end of the 99th Congress. Mr. Speaker. the .parliamentary situation in committee did not allow the offering of three amendments needed to complete and clarify title I. the FSLIC -recapitalization.- These are included in a committee amendment -I am offering today which provides for: First. extending the -net worth certificates to assist savingsand loans under the GarnSt Germain Act of 1982. second. clarifying the use of thrift institutions secondary reserves as it relates to the FSLIC recapitalization. and third. a phasedown of the -special assessments on thrift institutions. Committee members are in favor of these amendments which. are part of a similar bill pending in the other body and I expect some accommodation can be made -on these matters in -any conference that may occur. Mr. Speaker. I reserve the balance of my time.