Date: 1983-08-03
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Chairman. since the committee reported favorably H.R. 2957 on May 10. a bipartisan effort has been underway to eliminate. to the maximum extent possible. controversy not central to the primary purposes of titles III and IV which provide for the controversial quota increase accompanied by stricter regulatory requirements for international lending than now exist. Those who oppose the use of the Federal Financial Institutions Examination Council have misconstrued its basic purpose and its potential. but in the spirit of compromise the committee amendment eliminates this greater role for the Council. leaving for another day what. in essence. are consolidation issues. The inclusion of the Council in title IV was intended to bring about greater unity among the three bank regulatory agencies. It was the committees view that it was unreasonable to call for greater consultation and coordination internationally when our own regulators do not adequately consult and agree with each other. The committee amendment deletes all reference to the Exam Council in this title. relying upon existing regulatory agencies to carry out its mandate. After receiving and evaluating the reports required by title IV. we will return to the question of the most efficient manner in which to bring about necessary worldwide regulatory and supervisory improvements. The committee amendment also deletes the legislative review provision in the bill. This provision would have given Congress the authority to review regulations issued to implement title IV of the bill. While we believe that such a review would be beneficial and could be accomplished without significant slowing of the regulatory process. we are also mindful of the confusion and uncertainty about all types of legislative review and veto provisions in the wake of the Supreme Court decision in Chadha. In an effort to minimize still further controversy. we have decided to delete the provisio. and review it in the context of the overall effort now going on in the House to develop alternatives to the traditional legislative veto provisions. In the meantime. we are confident that the oversight function that is maintained and indeed strengthened in other parts of this committee amendment will provide ample ways for the Banking Committee to closely monitor regulatory activities under this legislation. I assure Members that the Banking Committee intends to remain vigilant in carrying out its oversight responsibilities. The reports required in title IV will enhance the committees ability to carry out its oversight responsibilities. The committees amendment consolidates all of the requirements for congressional reports in title IV of the bill into one section. These reports call for an assessment of international bank supervision in other countries. a report on progress in strengthening the capital bases of banks involved in international banking throughout the world. and a report on actions taken by the agencies for implementation. The committee amendment also strikes a section of the bill which exempts the regulators from the requirements of the Paperwork Reduction Act and the Regulatory Flexibility Act. which was included in an effort to assure prompt implementation of the requirements of this title. This provision was originally requested by the regulators. but as a result of understandable concern raised by several Members. the committee has reconsidered and agrees that without the most compelling reasons for so doing Congress should not begin a pattern of exempting the regulatory agencies from these two statutes. The effect of the committee amendment. however. is not intended to impede the bank regulatory agencies from requiring and collecting substantial amounts of new information from international financial institutions as required by title IV. The Paperwork Reduction Act requires a decrease in the information collection burden imposed by the Government. The committee amendment is not intended to be interpreted as requiring the bank regulatory agencies to reduce the other information requirements and collections they carry out in order to compensate for the increEsed reporting mandated in this title. The importance we associate with the regulatory and information requirements of this title are reflected in the fact that we have in the committee amendment reduced the time available to the agencies to issue their new supervisory and informational regulations. Moreover. we do not intend by the committee amendment that the Regulatory Flexibility Act should in any way interfere with the proper performance by the banking agencies of their responsibilities under this legislation. The Regulatory Flexibility Act is intended to prevent undue regulatory burdens on small businesses. The requirements of H.R. 2957. however. would fall on large international banks and the agencies that regulate them. Therefore. it is our hope that the exemption and flexibility provisions of sections 605 and 606 of the Regulatory Flexibility Act be fully utilized to facilitate implementation of this legislation. The fourth provision of the committee amendment relates to the extremely important subject of adequate bank capital. The gentleman from Iowa. Mr. LEACH. has truly performed yeomanlike services in the area of requiring banking institutions to maintain adequate capital levels. His previous amendment was accepted in committee. His continuing efforts have led to the committees clarifying amendment today which spells out the committees intent that banks involved in international lending should strengthen their capital bases. and that capital standards for banks should not discriminate on the bases of asset size. It is interesting to note that after nearly 20 years of debate. analysis. meditation and what have you. the regulators finally on June 13. thirtythree days after committee action. adopted more stringent capital adequacy standards. This fourth provision of the committee amendment clarifies the authority of the Federal banking agencies to establish minimum levels of capital for banks. The provision also confirms the authority of each agency to require individual banks to achieve such other capital level as deemed appropriate in light of the particular circumstances of. each institution. That is. the amendment confirms the remedial authority of an agency to prescribe such higher level as may be appropriate for a specific bank. or to waive the generAugu8t . 1983 ally applicable standard in extraordinary circumstances. This essential supervisory authority was recently clouded by the decision of the U.S. Court of Appeals for the Fifth Circuit in the First National Bank of Bellaire against ComDtroller of the Currency. The committee believes that the authority of an agency to require a bank to maintain adequate capital is properly within the expertise and discretion of the agency. subject to the appropriate standard of judicial review. I urge the Houses acceptance of the committee amendment. Mr. Chairman. I yield to the ranking minority Member. the gentleman from Ohio .