|FOR IMMEDIATE RELEASE:||CONTACT: CHRISTI HARLAN|
|Tuesday, January 12, 1999||202-224-0894|
Financial Modernization. This is the biggest piece of unfinished business from the previous Congress. The same forces that brought the banking, insurance, and securities industries together last year are still at work this year. Those forces are not personalities, or political parties, or government agencies. They are the market forces and technological changes that already are breaking down the barriers between these industries. These market forces and technological changes are just as active and powerful as ever and will propel the process forward this year.
Community Reinvestment Act. CRA was enacted in 1977 to encourage banks and thrifts to make loans in the same communities where they obtained their deposits. Since then, evidence points to a growing abuse of CRA to extort cash payments and other benefits from banks and thrifts. The Committee will examine these concerns and determine whether reforms are needed to refocus CRA on making loans to local communities.
IMF Reform. Last year's funding bill made some significant changes in the way that the IMF does business, particularly in what it requires the IMF to include in its assistance packages to countries in financial trouble. These reforms include requirements that recipient countries end crony capitalism, that they open their markets to trade, that they give foreign creditors equal treatment in bankruptcy proceedings. And they require that the U.S. promote the implementation of non-inflationary monetary policies by recipient countries. The Banking Committee will conduct very careful oversight to ensure that these reforms are carried out.
Financial Institutions Regulatory Reform. Last fall the Banking Committee approved a package of banking regulatory reforms (Shelby/Mack, S. 1405), but the Congress adjourned before that bill was taken up by the full Senate. That bill will be reintroduced and available for early action.
Securities Regulatory Reform. In 1996, the Congress enacted landmark securities reform legislation, making major and minor changes to virtually every federal securities statute. The Committee will turn once again this year to legislation to update our securities laws, and has requested recommendations for action from private entities and government agencies.
Public Utility Holding Company Act. PUHCA reform was adopted by the Banking Committee last Congress but not taken up by the full Senate. That legislation will be reintroduced and acted upon by the Committee early this year.
HUD Oversight. Last Congress, under Senator Connie Mack's leadership, significant reforms were enacted to our housing laws and regulations. Chairman Gramm will ask the Chairman of the Housing and Transportation Subcommittee to conduct rigorous oversight to ensure that these reforms are implemented.
Financial Derivatives. The committee will carefully review the way in which the banking regulators are examining banks and thrifts to make sure that they are properly evaluating the risk involved in lending to entities that trade financial derivatives. The Senate Agriculture Committee held a hearing in December on the near failure of the Long Term Capital Market hedge fund. That hearing demonstrated that the banking regulators may not have been careful enough in ensuring that the banks that they supervise were properly evaluating the risk of those to whom they were lending. Ensuring that the banking regulators do their job is our job, and we will do it.
General Oversight. Oversight is an important function of any committee. One of the tools that the Banking Committee will adopt to emphasize that oversight role is to name for every subcommittee a vice chairman for oversight, whose specific task will be to ensure that the committee meets its responsibility to ensure that government agencies are acting in the public interest.