Thank you Mr. Chairman for convening today's hearing to discuss S. 1405, the Financial Regulatory Relief and Economic Efficiency Act.

As I indicated at the hearing last week, I would like to commend Senators Shelby and Mack for including provisions of the Small Business Banking Act, a bill which I cosponsored with Senator Hagel, in S. 1405. Specifically, these provisions will enable banks to pay interest on commercial checking deposits, which is currently prohibited by the Glass- Steagall Act and Regulation Q

Because a number of large financial institutions have developed means of circumventing the prohibition, the prohibition has primarily burdened small banks and their small business customers. As a result, removal of the prohibition will be boon to small banks and the small business community.

Although I strongly support the provisions allowing the payment of interest on commercial checking deposits, I do have concerns with several other provisions of S. 1405. Specifically, I am concerned about Section 204 of the bill which eliminates the anti-tying provisions of the Bank Holding Company Act Amendments of 1970. Currently, the Federal Reserve has broad authority to grant exemptions to the tying prohibition. In light of this fact, it is unclear why the general prohibition must be repealed.

I am also concerned with Section 206 of the bill which allows affinity groups to receive referral fees for endorsing settlement service providers. This provision would effectively amend RESPA, which prohibits the payment of referral fees, and could potentially increase the cost of settlement services to consumers. Also, as many of you are aware, the Mortgage Reform Working Group is currently looking at comprehensive RESPA reform, and I believe that enactment of this provision would undermine this process.

Finally, I am concerned with provisions in the bill that would create several exemptions to the Fair Debt Collections Practices Act. I fear that the breadth of these provisions would significantly diminish consumer protections and would enable debt collectors to employ abusive collection practices.

As the Committee continues its consideration of S. 1405 I would hope that these concerns could be addressed. I look forward to witness testimony.

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