[Pages H11513-H11551]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

CONFERENCE REPORT ON S. 900, GRAMM-LEACH-BLILEY ACT

Mr. SESSIONS. Madam Speaker, by direction of the Committee on Rules,
I call up House Resolution 355 and ask for its immediate consideration.
The Clerk read the resolution, as follows:

H. Res. 355

Resolved, That upon adoption of this resolution it shall be
in order to consider the conference report to accompany the
bill (S. 900) to enhance competition in the financial
services industry by providing a prudential framework for the
affiliation of banks, securities firms, insurance companies,
and other financial service providers, and for other
purposes. All points of order against the conference report
and against its consideration are waived. The conference
report shall be considered as read.

The SPEAKER pro tempore. The gentleman from Texas (Mr. Sessions) is
recognized for 1 hour.

{time} 1945

Mr. SESSIONS. Madam Speaker, for the purpose of debate only, I yield
the customary 30 minutes to the gentleman from Massachusetts (Mr.
Moakley), the ranking member of the Committee on Rules, pending which I
yield myself such time as I may consume. During consideration of this
resolution, all time yielded is for the purpose of debate only.
Madam Speaker, the legislation before us is the rule providing for
consideration of the conference report S. 900, the Financial Services
Act of 1999. S. 900 is better known to Members of the House as H.R. 10,
which was passed on July 1 of this year by a margin of 343 to 86.
Should the House pass this rule, it would hold its place in history
as being one of the final steps in the long and hard-fought effort to
repeal Depression era rules that govern our Nation's modern financial
services industry.
The rule before us waives all points of order against the conference
report and its consideration. The rule also provides that the
conference report shall be considered as read.
Madam Speaker, this rule deserves strong bipartisan support. The
House passed the underlying legislation with broad support from both
parties. The Financial Services Act was only made better in the
conference to reconcile differences between the Senate and the House
versions.
Madam Speaker, 65 years ago, on the heels of the Great Depression,
the Glass-Steagall Act was passed prohibiting affiliation between
commercial banking, insurance and securities. However, merely 2 years
after the passage, the first attempt at repealing Glass-Steagall was
instituted by Senator Carter Glass, one of the original sponsors of the
legislation. He recognized then that changes in the world and in the
marketplace called for more effective legislation.
Two generations later the need to modernize our financial laws is
more apparent than ever.
There is no doubt about it. Reexamination of regulations in the
financial services industry in America is a complicated matter.
Congress recognizes

[[Page H11514]]

that busy American families have little time to consider complicated
banking laws, but Congress is working to repeal Glass-Steagall with
exactly these hard-working Americans in mind.
This legislation is designed to give all Americans the benefit of
one-stop shopping for all of their financial services needs. New
companies will offer a broad array of financial services products under
one roof, providing convenience and encouraging competition. More
products will be offered to more people at a lower price.
As a result of this legislation, Americans will have more time to
spend with their families and more money to spend on their children or
to save safely for their future. In fact, as it was pointed out
yesterday by Treasury Secretary Summers, Americans spend more than $350
billion per year on fees and commissions for brokerage, insurance, and
banking services. If increased competition yielded savings to consumers
of just 5 percent, consumers would save over $18 billion a year.
Americans deserve the most efficient borrowing and investment
choices. Americans deserve the freedom to pursue financial options
without being charged three different commissions by three different
agents.
This legislation is designed to increase market forces in an already
very competitive marketplace to drive down costs and broaden the number
of potential customers for securities and other products for savings
and investment.
Madam Speaker, this legislation also contains the strongest pro-
consumer privacy language ever considered by the Congress. Many of my
constituents have contacted me with their concerns regarding the
dissemination of their private financial information. I am pleased that
this legislation provides increased privacy protections for all
Americans and imposes civil penalties on those who would violate our
financial privacy.
Madam Speaker, Congress must not permit America's financial services
industry to enter the new millennium operating under laws that were out
of date shortly after they were passed in the 1930s. This legislation
before us represents a carefully balanced approach to reform. After
years, in fact, even decades of work, Congress has only now
successfully drafted a bill that is supported by most of the affected
industries, banking, insurance and securities, as well as a broad
bipartisan coalition of Members of Congress. It was passed by the
Senate just hours ago with 90 votes.
Madam Speaker, the rule before us is the standard rule under which
conference reports are considered. I urge my colleagues to support this
rule, and thereby enable the House to take the historic step of
modernizing the 66-year-old laws that govern the financial services
industry.
Madam Speaker, I reserve the balance of my time.
Mr. MOAKLEY. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, I thank my dear friend from Texas for yielding me the
customary one-half hour.
Madam Speaker, after 66 years, Congress has finally updated our
Depression era banking laws to modernize the way American banks,
securities firms and insurance companies do business. For the first
time since 1933, Congress is replacing the Glass-Steagall Act, which
was passed to separate banking from commerce during the Great
Depression.
This bill will modernize and streamline our financial industry, and
it will allow American financial companies to work more efficiently.
Madam Speaker, in doing so, it will give consumers greater choice at
lower cost; and in the long run, people will find it easier to access
capital, and American financial firms will be able to stay competitive
in our increasingly global economy.
Madam Speaker, the bill's benefits are not just limited to large
financial institutions. It will benefit small banks by giving them
access to the Federal Home Loan Bank window. That way they will have
access to more capital, which they can in turn lend to smaller
communities and smaller businesses.
Madam Speaker, it is a good bill, but there are a couple of areas
that could be improved and improved greatly. First, this bill does not
go far enough to protect people's privacy. Secondly, this bill does not
go far enough in strengthening the Community Reinvestment Act. If we
are able to amend this bill at this point, Madam Speaker, I would
certainly support an amendment to expand the Community Reinvestment
Act, as well as the amendment of the gentleman from Massachusetts (Mr.
Markey), to help keep people's private lives private. Unfortunately,
amendments are not an option at this point, and we must decide whether
or not this bill is an improvement over our current situation.
Madam Speaker, I believe this bill is a great improvement. It is a
good bill. It is long overdue. It will spawn new financial services,
promote competition and lower costs. Overall, I believe it will be good
for the country and we should support it.
I urge my colleagues to support this rule and support the bill.
Madam Speaker, I reserve the balance of my time.
Mr. SESSIONS. Madam Speaker, I yield such time as he may consume to
the gentleman from California (Mr. Dreier), the chairman of the
Committee on Rules.
(Mr. DREIER asked and was given permission to revise and extend his
remarks.)
Mr. DREIER. Madam Speaker, I thank my friend for yielding me time.
Madam Speaker, it is almost perverse to think one could get excited
about the prospect of financial modernization, but I will tell you that
this really is an exciting time for a lot of us.
I am looking at the distinguished ranking minority member of the
Committee on Banking and Financial Services, and I think back to 1987
and a piece of legislation that was known as the Financial Services
Holding Company Act. I know that the gentleman from New York (Mr.
LaFalce) remembers that, and I think of names of people who no longer
serve here, people from the other side of the aisle like, Doug Bernard,
the gentleman from Massachusetts (Mr. Moakley) remembers him, and Steve
Neal; and people who spent time with us on this side of the aisle who
are no longer here, like Jack Hiler from Indiana, and Steve Bartlett
from Texas, and Governor Tom Ridge from Pennsylvania.
In the latter part of the last decade we spent a great deal of time
downstairs having dinners, talking about the need for us to move
towards financial modernization; and we finally have gotten to the
point where we are doing that. In fact, one of my staff members quipped
to me when I said, ``Well, we are finally doing it,'' and he said,
``Well, you know, this is a really good bill for 1987,'' which is when
we first introduced it.
That is why I described this bill, I think, very appropriately as a
first step, because it is a first step that is a very bold one. It
takes us beyond the 1933 Glass-Steagall Act. In fact, we describe this
as moving us from what I really believe was the curse of Glass-
Steagall, and I think that it also moves us slightly beyond by amending
the 1956 Bank Holding Company Act. But it is designed with really one
very simple basic thing in mind: it is to provide consumers with a
wider range of choices, while maintaining safety and soundness at the
lowest possible price. That is clearly the wave of the future.
I want to commend the gentleman from Iowa (Mr. Leach) and the
gentleman from New York (Mr. LaFalce), whom I have mentioned, the
gentleman from Virginia (Mr. Bliley), and, of course, from the
Committee on Rules, the gentleman from Texas (Mr. Frost), who was just
here, who worked with the gentlewoman from Ohio (Ms. Pryce) on this
very important privacy issue.
We know that in this legislation we have the toughest privacy
component that we have ever seen in any legislation considered here. I
think it is important to underscore that once again, because there are
a lot of people who have been critical of it, and I believe this
clearly is the toughest privacy language that we have ever had. We are,
by way of doing this, providing the consumer with a wider range of
choices.
This is a measure which could not have gotten here were it not for an
awful lot of people. I look back at the gentleman from Louisiana (Mr.
Baker), with whom I worked closely on this issue for years, and I think
that this is time for a great, great celebration.

[[Page H11515]]

Now, where is it that we go from here? Last night in the Committee on
Rules we were talking about this, and I believe that we need to look at
the Internet. We need to look at the fact that the wave of the future
there is in electronic banking. I think that, frankly, on the Internet,
we are going to see a strengthening of privacy, because that is a
priority that is regularly before us for people who spend time on the
Internet. So I am anxious and I was pleased when the gentleman from
Minnesota (Mr. Vento) told us in the Committee on Rules that the
Committee on Banking and Financial Services is moving ahead with
hearings that will take us even further.
So I consider this a first step. It is a first step which is a very,
very important step towards getting us to where many of us have been
trying to move for virtually a decade and a half.
Madam Speaker, I am very pleased to support the rule, and I believe
that the conference report should get an overwhelming number of votes.
We had 343 votes on the bill itself, and it is my hope that we will
even exceed that on this conference report.
I thank my friend for yielding, and I thank him for his leadership in
carrying this on behalf of the Committee on Rules.
Mr. MOAKLEY. Madam Speaker, I yield 2 minutes to the gentleman from
Texas (Mr. Frost).
Mr. FROST. Madam Speaker, I rise in support of the conference report
on S. 900, the Financial Services Modernization Act. Over the years,
this legislation has slowly and sometimes painfully inched its way
toward today. In the process, the concept of financial services
modernization has shifted and changed. But in the end, the legislation
before us today is the product of a deliberate process that will serve
our economy and consumers well.
I think we can all agree that S. 900 is not a perfect bill; but,
Madam Speaker, legislation of such magnitude as this, legislation which
will usher in a new era of commerce in this century, could never hope
to satisfy all parties. That being said, S. 900 represents historic
change, change I believe that will particularly benefit the economy of
this country, which will, in turn, benefit all Americans.

{time} 2000

Madam Speaker, I would like to take a moment to reiterate my
longstanding support for the Community Reinvestment Act. There are some
who believe that this bill does harm to CRA. I could not support S. 900
if I believed that to be true. I have seen firsthand the value and
benefits CRA has brought to low- and moderate-income neighborhoods in
my own congressional district in Texas. I know that there is still much
work to be done.
Madam Speaker, S. 900 does not diminish the efficacy of CRA. It does
not change the existing CRA obligations on insured depository
institutions in any way. In fact, CRA compliance is highly relevant to
banks in the new regulatory scheme that will be created by this
landmark bill. I know that I for one will monitor the activities of
banks to ensure that they live up to and perhaps go beyond the
requirements of CRA in this new world of financial services.
I want to go on record as strongly encouraging financial institutions
to make sure that the benefits of this law will be felt in every
neighborhood in our country.
Madam Speaker, I urge Members to support this bill. It represents a
great step forward into the new century. It is worthy of our support.
Mr. SESSIONS. Madam Speaker, I yield 3 minutes to the gentlewoman
from Ridgewood, New Jersey (Mrs. Roukema), chairman of the Subcommittee
on Financial Services and Consumer Credit.
Mrs. ROUKEMA. Madam Speaker, I thank the gentleman for yielding time.
Madam Speaker, I really do rise in strong support of this bill. This
is truly historic, landmark legislation. In some respects, this is
really long overdue. In fact, the marketplace, the regulators, and the
courts have been transforming on an ad hoc basis financial institutions
for a number of years. Our obligation here tonight is to perform our
statutory responsibility under the Constitution to construct this
regulated system to serve the consumers, the businesses, and the
marketplace.
Again, it is truly historic. Technology and market forces have broken
down the barriers between insurance, securities and banking. This law
is a very good piece of legislation, and it will permit us in the U.S.
to maintain our preeminence in the field of financial services on a
global basis, both now and in the future, in that new millenium that we
love to talk about.
This legislation is also historic because of its privacy provisions.
I am very proud to have sponsored, along with the gentleman from Ohio
(Mr. Oxley) and the gentlewoman from Ohio (Ms. Pryce) in the original
amendment here in the House, but the gentleman from Ohio (Mr. Oxley)
and I were able to get good privacy provisions that even go beyond what
we adopted in the House in this final product.
I think that we have got to recognize, although some people have
questioned the privacy provisions, we have to recognize that there are
newer and stronger privacy protections in this legislation than
Americans have ever had. I know some of my colleagues will say it does
not go far enough. Maybe I would agree with them. But it is more than
just a good start, it is a firm foundation upon which we can and will
build either next year or in the next Congress, in future Congresses.
Indeed, my subcommittee, the Subcommittee on Financial Institutions
and Consumer Credit, has already had two essential hearings on this
subject of privacy. We will continue to probe this complex subject next
year.
Aside from some of the other consumer protections, the ATM fee
disclosure, for which I would like to take credit before my colleagues
here tonight, consumers have a right to know and a right to cancel that
transaction, that is here in this bill.
Madam Speaker, I want to point out the most essential part of this
bill, which is the fact that the Treasury Department and the Federal
Reserve have reached the core issue in the bill with the consensus
portion of it that will really protect the safety and soundness issues
that we love to talk about. It is essential to protect against
conflicts of interest and corruption of the regulatory process.
It took them many years, or I am sorry, many months to come to this,
but with their great integrity and their great knowledge of financial
institutions and understanding about the savings and loan debacle that
we have already been through and the Great Depression of the thirties,
they put their heads together and they formed the core of this bill
that will protect safety and soundness, and give us the advantages of
financial modernization.
I have a lot more I could say. I do want to congratulate everyone who
has worked on this bill. We must support it with a strong, overwhelming
vote.
Madam Speaker, I rise in strong support of the Conference Report on
S. 900, the Gramm-Leach-Bliley Financial Modernization Act.
This is truly historic, landmark legislation. And in some respects is
long overdue. In fact, the marketplace, the Regulators and the Courts
have been transforming financial institutions. Our obligation here
today is to perform our statutory responsibility under the Constitution
to construct this regulated system to serve the consumers, businesses
and the marketplace.
As others have discussed, this bill repeals the Glass-Steagall Act
and the other Depression era banking and securities laws to permit the
affiliation of banks, securities firms and insurance companies. As
Chairwomen of the Financial Institutions and Consumer Credit
Subcommittee, I have long been an advocate for passing financial
modernization legislation. Technology and market forces have broken
down the barriers between insurance, securities and banking. This law--
which is an extremely good product--will permit the U.S. to maintain
its preeminence in the field of financial services. That is essential
to maintaining U.S. prominence in the global financial world both now
and in the new Millennium.
This legislation is also historic because of its privacy provisions.
I am very proud to have sponsored--along with Mr. Oxley--the privacy
provisions we find in this bill today. He and I, along with Ms. Pryce,
offered the Privacy Amendment which the House adopted by 427-1 when
H.R. 10 was passed back in July. In Conference, Mr. Oxley and I offered
the House text with some provisions which ``strengthened'' privacy.
Other improvements were accepted by the Conference, including Senator
Sarbanes' amendment which protects stronger State privacy laws from
preemption. In other words, the Conference Report we are

[[Page H11516]]

considering today has better, stronger privacy provisions that what
passed the House 427-1.
Think about the new Privacy Protections in this Bill:
1. Financial Institutions for the first time are required to have
written privacy policies which must be disclosed to their customers.
2. Financial Institutions for the first time are required to give
customers the right to ``opt out'' of sharing their information with
3rd parties.
3. Stricter State privacy laws are not preempted.
4. Telemarketers are prohibited from receiving deposit account
numbers, credit card numbers and other information from financial
institutions.
5. It is now a ``crime'' for a person to ``pretext'' call a financial
institution and get your personal financial information.
These are all new, stronger privacy protections that Americans don't
have under current law.
I know some of my colleagues will say we didn't go far enough. Quite
frankly, I agree. But this is more than just a good start--it is a
strong ``foundation'' upon which we can, and will, build next year and
in future Congresses. My Subcommittee has already had two hearings on
these issues and will continue to probe this complex subject next year.
I, for one, was disappointed that we did not ``fix'' the medical
records privacy provisions which were authored by Dr. Ganske.
Unfortunately, the Administration, most medical groups and many of my
Democratic colleagues weren't interested in ``fixing'' this important
area. They demanded that we remove the medical records privacy
provisions and ``wait'' for the comprehensive medical records privacy
legislation. This was a huge mistake, a missed opportunity to do
something for all Americans. I don't want to hear anyone who demanded
the medical records provisions come out try to complain now that
medical records privacy is not in S. 900.
I want to say that I am pleased that Gramm-Leach-Bliley includes my
ATM Fee Disclosure proposal. Under this bill ATM Fee surcharges are
prohibited unless the customers are told what the fee is before being
committed to enter into the transaction. Consumers are entitled to know
what fees, if any, are going to be charged for using a foreign ATM.
This is both common sense disclosure and pro consumer. The consumer has
a right to know and a right to cancel the transaction.
Madam Speaker, I would also like to address briefly the issues
central to sound legislation, namely, the split of regulatory
jurisdiction over the holding company--and its affiliates--and the
national bank operating subsidy.
One of the most contentious issues during the Financial Modernization
debate was the National Bank operating subsidiary. The Treasury--and
Administration--made it clear that they would veto any bill which did
not provide the OCC and National Banks with new, expanded financial
powers. At the same time, the Federal Reserve Board expressed strong
reservations about such new authority on both safety and soundness and
government subsidy grounds.
Many observers said this was merely a regulatory ``turf'' battle
between the Treasury Department and the Federal Reserve. I strongly and
pointedly disagree. This is a safety and soundness issue. It is
essential to protect against conflicts of interest and corruption of
the regulatory process. We need to explicitly protect against another
savings and loan debacle or a financial collapse that brought on the
Great Depression of the 1930's.
The decision of the Conference was to adopt, and endorse, the
operating subsidiary compromise reached by the Treasury Department and
the Federal Reserve. This ``compromise'' places several significant
restrictions on the financial subsidiaries of national banks. For
instance, financial subsidiaries may not engage in (1) insurance or
annuity underwriting, (2) real estate investment or development and (3)
merchant banking, for at least 5 years and then only if the Federal
Reserve and Treasury jointly agree. Further, there is an overall or
``aggregate'' investment cap which limits the size of financial
subsidiaries of national banks as well as other additional
``firewalls'' and safety and soundness provisions.
I support the FED/Treasury compromise. I believe we have struck the
right balance on the operating subsidiary. During the Conference I
proposed dropping merchant banking and imposing an aggregate investment
limit to address safety and soundness concerns. I am happy that the
FED/Treasury compromise incorporates my suggestions.
While I would have preferred a flat out prohibition on merchant
banking in the operating subsidiary, the 5 year minimum waiting period
with joint agreement between the Treasury and the Federal Reserve is
acceptable.
I am more concerned, however, about the aggregate investment limits.
In my opinion the limits are too large. I proposed a $100 million limit
on equity investment in all operating subsidiaries controlled by a
national bank. The FED/Treasury compromise ``limits'' the aggregate
size of all operating subsidiaries controlled by a national bank to 45
percent of aggregate assets of the parent bank or $550 billion,
whichever is less. This may, in fact, be no limit at all.

The aggregate investment limit is intended to make sure that the
financial subsidiaries do not pose a safety and soundness risk to the
parent bank--which may not be the case here. As one who was in Congress
during the savings and loan crisis, I would encourage the OCC and
Treasury to take a ``go slow'' approach in the financial subsidiary
area in terms of both new activities and ``aggregate'' size.
Another issue which is central to this bill is the unitary thrift
holding company and whether the mixing of banking and commerce is
appropriate. Fortunately the Federal Reserve and Treasury Department
were united on this issue. Both supported--along with consumer groups--
closing the unitary thrift holding company ``loophole'' and prohibiting
the transfer of grandfather unitary thrift holding companies to
commercial entities because of concentration of economic power as well
as safety and soundness concerns. Those were my concerns--along with
making sure we have a consistent policy and level playing field between
bank and thrift holding companies--as well. The Gramm-Leach-Bliley bill
closes the ``loophole'' and prohibits transfer of grandfathered
unitaries to commercial entities. It was the right thing to do.
And for the record, I must mention the loan loss provision.
I would also like to briefly mention the loan loss provision in this
Bill which I authored. Section 241--which passed the House by a vote of
407-20--is extremely important and is a ``good government'' provision.
It requires the SEC to consult and coordinate with the Federal Banking
agencies prior to taking any action with respect to an insured
depository institution's loan loss reserves.
I am not going to go into detail regarding the SEC's actions with
respect to SunTrust Bank and the FASB Viewpoints Article. Let me just
say that over a period of 9 months the SEC created significant
confusion in the banking industry, the accounting profession and the
Federal Banking agencies on what the accounting rules are for bank loan
loss reserves. Their failure to adequately consult and coordinate with
the Federal banking agencies on this issue is well known.
Under Section 241 we expect the SEC to establish an informal process
with the Federal Banking agencies for consultation and coordination on
individual loan loss cases. The SEC has suggested that the consultation
and coordination requirement will slow the review process and penalize
banks and bank holding companies. It is not our intention that the
consultation and coordination process should delay SEC processing of
securities filings. Rather, the process which the SEC establishes
should be designed to expedite resolution of SEC staff questions. The
informal process we envision should involve telephone conferences, the
faxing of relevant information between staffs, as well as other methods
of communication which could expedite as quickly as possible the
resolution of individual loan loss reserve cases.
In closing, Madam Speaker, I want to make it clear that I support
Gramm-Leach-Bliley strongly. It is a very good bill. It deserves our
support. I encourage you to vote for the Conference Report.
Mr. MOAKLEY. Madam Speaker, I yield 1 minute to the gentleman from
Ohio (Mr. Kucinich).
(Mr. KUCINICH asked and was given permission to revise and extend his
remarks.)
Mr. KUCINICH. Madam Speaker, pursuit of happiness is an inalienable
right which supercedes the banking industry, the securities industry,
and the insurance industry.
In a democratic society, the right to privacy facilitates the pursuit
of happiness. It is the right to be left alone by powerful government,
by powerful corporations. The growth of databases requires government
to be a vigilant watchdog to protect the right to privacy. S. 900 puts
the watchdog to sleep.
If we look under title V, where it says ``Exceptions,''

This subsection shall not prevent a financial institution
from providing non-public personal information to a non-
affiliated third party to perform services for or functions
on behalf of the financial institution, including marketing
of the financial institution's own products or services, or
financial products or services offered pursuant to joint
agreement between two or more financial institutions.

So much for the right of privacy.
Madam Speaker, I include for the Record a copy of an article by
Robert Scheer from the L.A. Times:

[[Page H11517]]

Your Privacy Could Be a Thing of the Past

(By Robert Scheer)

Do you really want your insurance agent, bank loan advisor
or stockbroker to have a list of the movies you've rented,
the medical tests you've taken, the gifts you purchased and
the minute details of your credit history and net worth?
That's what can happen if this Congress and president get
their way with landmark legislation permitting insurance
companies, banks and stockbrokers to affiliate and thus merge
their massive computerized data bases. This will permit
surveillance of your personal habits on a scale unimaginable
even by any secret police agency in human history.
Your life will be an open book, to be plumbed and exploited
for profit, thanks to financial industry deregulation about
to be passed with massive congressional support and the
blessing of President Clinton.
Lobbyists for the financial oligarchs defeated a crucial
amendment to this legislation proposed by Sen. Richard C.
Shelby (R-Ala.) that would have required bankers,
stockbrokers and insurance agents to get consumers'
permission before sharing what should be personal information
about you.
Any congressional representative who votes for this bill
thus is denying you your basic right to privacy and ensuring
that the most intimate details of your life can be freely
bandied about throughout our wired world for gossip if not
solely for profit.
When it comes to serving the interests of the banks,
insurance companies and stockbrokers that represent the most
important source of campaign money for Republicans and
Democrats alike--$145 million in the last two years--there is
but one political party. That's the bipartisan party of
political greed representing corporate conglomerates, and it
has no qualms about skewering the ordinary consumer.
Once again, everyone who mattered--except consumers--was
taken care of when the big congressional deal was cut last
week in a closed back-room conference committee meeting. The
scam brokered at 2 a.m. eliminates the firewall what has
existed for 66 years between your bank, your insurance
company and those who trade your securities. The newly formed
conglomerates handling everything from credit card bills to
medical records would be allowed by this legislation to
freely exchange the details of your personal profile,
accurate or not, and without your permission.
Given the immense databases of information that now can be
rapidly searched and exchanged, no detail of your personal
life will be off limits to those who snoop for profit. That
cross-referencing to all aspects of your life is what the
lobbyists paid for.
``I would say it's probably the most heavily lobbied, most
expensive issue'' that Congress ever has dealt with, said Ed
Yingling, the chief lobbyist for the American Bankers Assn.
Yingling told the New York Times, ``This was our top issue
for a long, long time. The resources devoted to it were huge,
and we fought [for] it tooth and nail.''
Yingling isn't kidding about those resources, $163 million
on financial industry lobbying in the past two years, much of
it to the major congressional players. Christopher Dodd of
Connecticut, the top Democrat on the Senate Banking
Committee, received $325,124 between 1993 and 1998 from the
insurance industry, which gave the committee's chairman, Phil
Gramm (R-Texas), even more--$496,610. Gramm also got $760,404
from the securities industry and $407,956 from the bankers.
The bipartisan toadying to the industry lobbyists is a
disgrace. ``I'd say this is about consumers versus big
business,'' Shelby said. He added, ``This is an issue that
won't go away. We won't let it go away. People are going to
be raising hell about it more and more and more.''
It is a shame that Shelby's is such a lonely voice of
alarm. But there is still time for voters to demand to know
where their legislators in Congress stand on this surrender
of the basic right to privacy. It also is not too late to
pressure the White House to veto this bill if it does not
contain the Shelby privacy amendment.
The leading presidential candidates in both parties--
Democrats Al Gore and Bill Bradley and Republican George W.
Bush--all have obtained massive contributions from the
financial industry. This issue is the best litmus test of
whether any of them can muster the gumption to bite the hand
that feeds them. If they can't, when it comes to the most
decisive consumer issues, it doesn't really matter which one
becomes president.

Mr. SESSIONS. Madam Speaker, I yield 2 minutes to the gentleman from
Delaware (Mr. Castle).
(Mr. CASTLE asked and was given permission to revise and extend his
remarks.)
Mr. CASTLE. Madam Speaker, I thank the gentleman for yielding time to
me.
Madam Speaker, I also rise in strong support of the rule and the
conference report on S. 900, the Gramm-Leach-Bliley Financial
Institutions Modernization Act of 1999. This is a long-awaited final
step in a decades-long effort to update our financial services laws. I
urge my colleagues to seize the opportunity to pass this historic
legislation, which will benefit individual Americans and help keep our
economy strong.
This legislation accomplishes a number of important goals that will
provide better financial services for millions of Americans and make
the American financial services industry more competitive.
First, it will eliminate outdated regulations that hinder
competition. More competition will give consumers more choices to save
and earn money on their investments.
Second, the bill will provide sound regulation, balance, and
flexibility for businesses. Banks will be able to choose the type of
structure that is best for them. This will allow companies to do so but
in a cost-effective manner and way, and produce the new product at
lower cost that we want for the financial security of our citizens.
Third, the bill allows new competition without endangering small
banks. A big commercial company will not be able to buy a savings and
loan and engage in unfair competition against a small, local bank.
Fourth, this legislation contains important new standards to protect
the financial privacy of American consumers. Financial services
providers will have to protect consumer information and inform
consumers about how this information is used.
Finally, this legislation continues the commitment for banks to meet
the needs of low-income Americans through the Community Reinvestment
Act. CRA standards are maintained while giving some relief to small
banks with excellent community lending records.
It is time for the financial services laws of our country to catch up
with the needs of the American people. This legislation will benefit
every American seeking to improve his or her family's financial
security by saving and investing more.
Let us move our Nation into the next century. I urge passage of the
rule and the conference report.
Madam Speaker, I rise in strong support of the conference report on
S. 900, the Gramm, Leach, Bliley Financial Services Modernization Act
of 1999. This is the long-awaited final step in the decades-long effort
to update our financial services laws. I urge my colleagues to seize
the opportunity to pass this historic legislation which will benefit
individual Americans and help keep our economy strong.
As we have heard many times, Congress has been trying to update the
Glass-Steagall Act since the 1930's and the Bank Holding Company Act
since the 1950's. Previous attempts to pass financial services reform
often failed because one financial industry or another felt that past
bills put them at a disadvantage. I have seen several of those attempts
fail in the six and a half years I have been in Congress. That struggle
is finally over. The banking industry, the securities industry and the
insurance industry agree that we must modernize these laws to improve
competition and meet the changing needs of consumers.
Madam Speaker, this legislation accomplishes a number of important
goals that will provide better financial services for millions of
Americans and make American businesses in the financial services
industry more competitive.
First, it will eliminate outdated regulations that hinder
competition. Banks, insurance companies and securities firms will be
able to affiliate and offer new banking, investment and insurance
products to American consumers. Competition will enable consumers to
choose new ways to save and earn money on their investments that go
beyond the products that are available today. The Treasury Department
has estimated that this new competition could save Americans billions
of dollars. These new business affiliations will be regulated in a
streamlined manner to protect American consumers and taxpayers.
Second, the bill will provide sound regulation with flexibility for
businesses. Banks will be able to choose the type of structure that is
best for how they want to do business, but activities such as real
estate development, insurance underwriting and merchant banking will
have to be conducted in a separate affiliate to insure complete
financial safety and soundness. There will be balanced regulation of
these businesses by the Federal Reserve and the Department of
the Treasury. This will allow companies to do business in a cost-
effective manner and help produce the new products at lower cost that
we want for the financial security of every American who wants to
purchase them.

[[Page H11518]]

Third, the bill allows new competition without endangering small
institutions. We are protecting small banks from potential unfair
competition by ending a loophole that allows commercial firms to own a
savings and loan institution. This compromise on the unitary thrift
charter issue will allow commercial companies which now own a savings
and loan to retain them, but in the future, only financial companies
will be permitted to purchase these institutions. In other words, a big
commercial company will not be able to come into a small town by buying
a savings and loan and engage in unfair competition against a small
local bank. This will help prevent possible conflicts of interest and
potential unfair competition.
Fourth, this legislation contains important new standards to protect
the financial privacy of American consumers. Financial service
providers will have to protect consumer information; they will have to
clearly tell their customers what their privacy policies are; and,
consumers will have the right to choose not to have any information
shared with unaffiliated third parties. Also, this legislation will not
replace any additional privacy protections in any state. It will also
make it a federal crime for unethical individuals to attempt to gain
private financial information through deceptive tactics. These
standards are an important step in protecting the basic financial
privacy of all consumers.
And finally, this legislation continues the commitment for banks and
new financial service holding companies to meet the needs of everyone
in the community through the Community Reinvestment Act. CRA standards
are maintained without increasing the regulatory burden, particularly
for small banks. Republicans and Democrats alike should be proud we are
continuing this commitment in a manner that is fair to communities and
financial services businesses.
It is time for the financial services laws of our country to catch up
with the needs of the American people. Our constituents have been
looking for new and affordable products to give their families
financial security. We are long past the days when people were
satisfied with a simple savings account or life insurance policy. Most
Americans want to maximize their earnings and to find products that
will give them the best return.
The financial services marketplace has been struggling to meet
consumers needs within a regulatory structure that was created sixty
years ago.
The changes in this legislation will ultimately benefit every
American seeking to improve his or her family's financial security by
saving and investing more. This legislation will help them achieve that
goal by making more savings and investment products available in one-
stop shopping at competitive prices.
As a member of the banking committee, I have often been frustrated by
the long days and seemingly endless hours of negotiation that have gone
into this legislation, but I strongly believe that those long hours of
work have produced a piece of legislation that will help carry our
nation's economy into the next century. It will help produce good
products, more choices and hopefully lower prices for Americans, and it
will help our nation's financial services business grow and compete
successfully into the future.
Madam Speaker, we owe Chairmen Jim Leach and Tom Bliley our thanks
for persevering through tough negotiations on the myriad of issues in
this bill and to our colleague Senator Gramm for pushing this bill to
completion in the Senate. This bill also has a true bipartisan imprint
and the contributions of Congressmen LaFalce and Dingell should be
recognized.
The time is now to bring American financial services into the twenty-
first century. This legislation achieves that goal and I urge the house
to take the final step by passing this conference report today.
Mr. MOAKLEY. Madam Speaker, I yield 2 minutes to the gentleman from
New Jersey (Mr. Menendez), the vice chairman of the Democratic Caucus.
Mr. MENENDEZ. Madam Speaker, I thank the distinguished gentleman for
yielding time to me.
Madam Speaker, with all the rhetoric out there, there may be people
listening to this debate who do not know what difference this bill can
make in their daily lives. I think they deserve to.
In a word, it is about choice. It is about consumers having more
choices. If they do their banking at a small community bank and buy
their insurance from a local independent agent, they can continue doing
that. Nothing in this bill changes that, but it will open the doors to
new innovations for people who might want them.
With this bill, it is likely we will be able to dramatically reduce
the fees and prices we pay for financial services when we choose to do
business with a single company that offers banking, insurance, stock
and mutual fund needs, all under one roof.
Credit cards with permanently-fixed low interest rates may be
offered, along with these unified accounts. We may see new generation
ATM machines where on the way home from work we can view our mutual
fund, checking and savings account, pay all our bills, from whichever
account we decide, and then withdraw some cash for dinner, all in one
stop.
In fact, with this bill, consumers will see a whole new range of
options to cut their costs and make their lives more convenient.
It is also true that with these options comes legitimate concerns
about privacy. That is why this bill statutorily bans the sale of our
account information to third-party telemarketers. That is why we give
consumers the right to decide whether or not their information can be
shared with any unaffiliated party.
There are, in fact, a whole host of provisions in this bill that will
protect consumer privacy. Those against this bill want different
privacy provisions, an opt-in, an opt-out, a broader ban. We can debate
that all day, but remember, without this bill, consumers will continue
to have no privacy protections and will have no access to these lower-
priced services.
That is why a vote against this bill is in my mind a vote against
progress. A vote for this rule and for this bill is a vote for
protecting consumers' privacy and increasing consumer choice. I urge my
colleagues to support the conference report to S. 900, and I want to
congratulate, on our side of the aisle, the gentleman from New York
(Mr. LaFalce) and the gentleman from Minnesota (Mr. Vento) for all of
their hard work.
Mr. SESSIONS. Madam Speaker, I yield 2 minutes to the gentleman from
Rocky Ridge, Alabama (Mr. Bachus), the chairman of the Subcommittee on
Domestic and International Monetary Policy.
(Mr. BACHUS asked and was given permission to revise and extend his
remarks.)
Mr. BACHUS. Madam Speaker, if Members do not know where Rocky Ridge
is, it is at the end of Rocky Ridge Road. We used to tell people, if
you could find it, you can have it. Not many people took us up on the
challenge.
In 1933, Glass-Steagall. In 1933, if we wanted to travel across the
United States, we had to do so on gravel U.S. roads, U.S. highways, or
dirt top U.S. highways, dirt roads. If we wanted to travel on an
airplane, there were three-engine Ford tri-motor airplanes, biplanes.
They are in the Smithsonian today.
Our railroads, we had steam engines on our railroads. If we want to
see a steam engine today, we have to go to China. They are mothballing
their last few steam engines.
Today we still have Glass-Steagall. Now, imagine traveling across the
Nation on gravel U.S. highways. Imagine how time-consuming that would
be. Imagine how inefficient steam engines would be if they pulled our
freight trains. Imagine flying home on the weekends in a biplane. That
is what our banks and financial institutions are attempting to do every
day with a law that was passed in 1933.
1933 was the year that Albert Einstein emigrated to America. He
became famous and now he has died, but we still have Glass-Steagall,
until we pass this bill. Glass-Steagall will mean $15 billion worth of
savings to the American people each year. Not only will they save money
through convenience and competition, they will save time. Time is
money. It will be much more convenient.
It is time that we turned American ingenuity loose.
Madam Speaker, this legislation, in addition to making historic
reforms to the structure of our financial services industry creates new
protections for consumers, including a prohibition on a financial
institution disclosing non-public personal information inappropriately.
In creating this new regime, I thought it important that we understand
that the realities of day-to-day business for certain financial
institutions necessarily involves the disclosure of such information
and to make clear that we did not intend to interfere with such
legitimate actions.
Companies chartered by Congress to operate in the secondary mortgage
market are one such example. Because these companies do not engage in
mortgage transactions directly

[[Page H11519]]

with the consumer, they are not in a position to provide the notices
and disclosures that we call for in Title V. Sweeping them within Title
V's purview would have created burdens and uncertainty without
furthering the Title's consumer protection objectives. Therefore, the
Conference Report contains language I authored that exempts these
institutions from Title V's definition as long as they do not sell or
transfer non-public personal information to non-affiliated third
parties. The Conferees intend to provide the FTC with regulatory and
enforcement authority over secondary market institutions only to the
extent that such institutions engage in activities outside the
provisions of Section 502.
Let me make clear that the types of ``transfers'' that would pull
these institutions back within Title V's scope are transfers other than
those contemplated by Sections 502(b)(2) or 502(e). For institutions
covered by Title V, we recognize that the uses of non-public, personal
information that Sections 502(b)(2) or 502(e) contemplate are
legitimate. This same standard applies to the secondary market
institutions covered by Section 509(3)(D). To the extent that these
companies go beyond these parameters, I expect that they will be
generally subject to Title V.
Finally, I am offended at the seemingly intentional misrepresentation
by certain mortgage insurance and mortgage lending groups of my
amendment's effect. My objective in offering this amendment and
securing its inclusion in the Conference Report was to exempt those
operating in the secondary mortgage market from Title V to the extent
that they engage in uses of information that Title V accepts as
appropriate and as creating no additional obligation on the part of
those institutions. In this manner, I wanted to ensure that these
companies remain able to fulfill the important purposes that Congress
chartered them to serve. Consumers in communities throughout the
country benefit from the liquidity and the access to affordable housing
finance that these institutions provide; indiscriminately subjecting
secondary mortgage market entities would have made consumers no better
off--and perhaps worse off.
Mr. MOAKLEY. Madam Speaker, I yield 2 minutes to the gentleman from
New York (Mr. LaFalce), the ranking member.
(Mr. LaFALCE asked and was given permission to revise and extend his
remarks.)
Mr. LaFALCE. Madam Speaker, I thank the gentleman for yielding time
to me.
Madam Speaker, I rise in support of the rule and of the conference
report on S. 900 and H.R. 10. In July the House passed its version of
financial modernization, H.R. 10, with a very broad bipartisan vote,
343 to 86. The Senate passed a partisan product by a very narrow margin
of 54 to 44.
The Senate version was a bill that the administration said they would
veto. Today we bring basically the House bill, a bill that the
administration says they can strongly support, that I strongly support,
that the consumers of America should strongly support.
Why? There are some simple, fundamental reasons. There are clear
gains in this bill for consumers, for communities, and for our
financial services system if the bill is enacted.
If this bill is not enacted, there would be clear losses. Without
this bill, banks will continue to expand, as they have been, into the
securities and into the insurance business. They have done this for
many, many years, on thousands of occasions. They would continue to do
so if this bill does not become law, but without the broader
application of CRA that this bill mandates. They would continue to do
so, but without any privacy protections whatsoever for consumers,
privacy protections that this bill mandates.

{time} 2015

They would continue to do so, but without the consumer protections
included in this bill that ensure consumers know the risks associated
with products they purchase and know whether or not they are insured.
They would continue to do so if this bill is not passed, but without
the increased regulatory oversight provided by this bill. Members
should embrace this bill for consumers, for communities and for the
future of the financial services industry of the United States.
Madam Speaker. I rise in support of the Rule and of the Conference
Report on S. 900.
In July, the House passed its version of financial modernization
(H.R. 10), with a broad bipartisan vote of 343-86. The Senate passed a
partisan product by a narrow margin of 54-44. The White House clearly
indicated it would veto the Senate version because of its negative
impact on the national bank charter, highly problematic provisions on
CRA and its nonexistent privacy protections.
The conference report necessarily represents a compromise between the
two versions. But it is a good and balanced compromise that effectively
modernizes our financial services industry under strong regulatory
controls, but also includes strong protections for consumers and
communities consistent with the original House bipartisan product. As a
result, the administration strongly supports the conference report.
I support this bill for very simple and fundamental reasons. There
are clear gains for consumers, for communities and for our financial
services system if this bill is enacted. There are clear losses if it
is not.
Without this bill, banks will continue to expand into the securities
and insurance business as they have been doing on thousands of
occasions for many years under current law. However, they would
continue to do so: Without the broader application of CRA this bill
authorizes; without any privacy protections whatsoever for consumers;
without the consumer protections included in this bill that ensure
consumers know the risks associated with products they purchase and
know whether or not they're insured; without the increased regulatory
oversight provided by this bill; and with artificial structural
limitations that will place the U.S. financial services industry at a
clear competitive disadvantage.
However Members choose to vote on this bill, they should vote based
on the facts. The facts are as follows.
Financial modernization. Many of the new activities, acquisitions,
affiliations and mergers this bill authorizes, with a variety of
regulatory and consumer protections, already have occurred, and will
continue to occur, under current law and court interpretation if this
legislation is not enacted. But they will occur without adequate
regulatory oversight and without the consumer protections built into
this bill. In large part, then, this bill rationalizes existing
practices.
Privacy. In the financial services context, federal law now offers
consumers no protection of their personal financial information, and
regulators have no authority to impose any. We are creating federal
privacy protections, for the first time. No financial services bill in
decades has gone to the floor with stronger privacy protections--
indeed, with any privacy protections. A vote for this bill is the
strongest pro-privacy vote that any Member of this House has ever been
able to cast. It is a vote for consumer privacy protection. The
provisions in this bill are now stronger than the privacy provisions of
the House product, which passed 427-1.
Community Reinvestment Act (CRA). This bill does not change existing
CRA obligations on insured depository institutions in any way. It, in
fact, substantially enhances CRA. Banks can now engage in securities
and insurance activity without satisfactory CRA performance being a
factor at all. For the very first time, the conference report applies
CRA to banks and their holding companies in the context of expansion
into activities such as securities, insurance underwriting and merchant
banking.
The conference report also deletes Senator Gramm's CRA exemption for
small or rural banks. It deletes Senator Gramm's ``CRA safe harbor''
that would have blocked community comments on most banks' CRA
applications and shifted the burden of proof unfairly to community
groups. For small banks, it targets CRA regulatory resources on banks
with the poorest CRA records, creating an incentive for better
community reinvestment performance. It ensures that the regulators have
complete authority to examine banks regarding their CRA performances as
frequently as they believe necessary.
The conference report also provides for disclosure of a limited set
of CRA agreements. But it substantially narrows the overbroad
provisions of the Senate bill and attempts to minimize the reporting
burden on community groups. Community groups are bringing new capital
and new financial services into low income communities through these
agreements. We, and they, have every reason to be proud of that record.
This disclosure provision, to the very limited degree it applies, can
only make that proud record apparent to everyone.
I would be remiss if I did not note that these legislative efforts
have a human face. First of all, I want to thank Chairman Leach who
kept this a fair and bipartisan process despite often heavy and
unfortunate pressure to do otherwise. I would also like to thank the
chairman's staff--Tony Cole, who we all hope is recuperating well, Gary
Parker, and Laurie Schaffer, and Legislative Counsels Jim Wert and
Steve Cope. I want to especially thank the Democratic Committee staff,
especially Jeanne Roslanowick and Tricia Haisten, without whose
tireless and effective efforts we would not have gotten to this point,
and also Dean Sagar, Patty Lord, Jaime Lizarraga, Kirsten Johnson-Obey.

[[Page H11520]]

This is a good bill which Democrats can be proud to support. I urge
your support of the conference report on S. 900.
Mr. SESSIONS. Madam Speaker, I yield 2 minutes to the gentleman from
Fullerton, California (Mr. Royce), a member of the Committee on Banking
and Financial Services.
(Mr. ROYCE asked and was given permission to revise and extend his
remarks.)
Mr. ROYCE. Madam Speaker, the historic legislation that we are
considering today is a win for consumers, a win for the U.S. economy
and a win for America's international competitive position abroad.
American consumers will benefit from increased access, from better
services, from greater convenience and from lower costs. They will be
offered the convenience of handling their banking insurance and
securities activities at one location.
More importantly, with the efficiencies that could be realized from
increased competition among banks, insurance and securities providers
under this proposal, consumers could ultimately save an estimated $18
billion in the estimates of our U.S. Treasury Department. This
reduction in the cost of financial services is, in turn, a big win for
the U.S. economy.
Finally, this legislation is a win for America's international
competitive position, as it will allow U.S. companies to compete more
effectively with foreign firms for business around the world.
In urging swift passage, Federal Reserve Chairman Alan Greenspan
said, we cannot afford to be complacent regarding the future of the
U.S. banking industry.
This legislation is 30 years overdue, Madam Speaker, and I urge my
colleagues not to delay its passage any longer. Let us support the rule
and let us support the bill.
Madam Speaker, the historic legislation that we are considering
today, is a win for the consumer, a win for the U.S. economy and a win
for America's international competitive position abroad.
American consumers will benefit from increased access, better
services, greater convenience and lower costs. They will be offered the
convenience of handling their banking, insurance and securities
activities at one location. More importantly, with the efficiencies
that could be realized from increased competition among banks,
insurance, and securities providers under this proposal, consumers
could ultimately save an estimated $18 billion annually.
This reduction in the cost of financial services, is in turn, a big
win for the U.S. economy.
Finally, this legislation is a win for America's international
competitive position, as it will allow U.S. companies to compete more
effectively with foreign firms for business around the world.
This legislation is 30 years overdue Mr. Speaker, and I urge my
colleagues not to delay its passage a day longer.
At this time, I would like to make a few clarifying remarks.
Included in Title VI of the bill before us are complex changes in the
structure of the Federal Home Loan Bank (FHLBank) System. I believe
these changes will enhance the ability of the System to help member
institutions serve their communities, though there is enormous work yet
to be done to implement these initiatives. Consequently, at the risk of
redundancy, it is important to reiterate the view expressed in the
conference regarding related regulatory actions.
As noted in the committee report, the conferees acknowledged and
supported withdrawal of the Financial Management and Mission
Achievement (FMMA) rule proposed earlier this year by the Federal
Housing Finance Board (FHFB), the FHL Bank System regulator. The FMMA
would have made dramatic changes in such areas as mission, investments,
liquidity, capital, access to advances and director/senior officer
responsibilities. Because of serious concerns over the FMMA's impact on
FHLBank earnings, its effect on safety and soundness and its legal
basis, the proposal has been intensely controversial among the
FHLBanks' membership, with over 20 national and state bank and thrift
trade associations calling for a legislated delay on FMMA.
Many conferees not only shared these concerns but also felt strongly
that the FMMA should not be pursued while the FHLBank System is
responding to the statutory changes in this bill. There was great
sympathy for a moratorium blocking the FMMA, but prior to the matter
coming to a vote, Chairman Morrison of the FHFB sent a letter to
Chairmen Gramm and Leach agreeing to withdraw the proposal, which I
want to make sure is part of the Record. He also promised to consult
with the Banking Committees regarding the content of the capital rules
and any rules dealing with investments or advances. The FHFB's
commitment not to act precipitously in promulgating regulations in
these areas creates the proper framework for effective and timely
implementation of the reforms that Congress is seeking to put in place.
The regulatory standstill to which the FHFB has committed should
apply to any final rules or policies applicable to investments, and the
FHFB should maintain the current $9 billion ceiling on member mortgage
asset pilot programs or similar activities. In the context of dramatic
impending changes in the capital structure of the FHLBanks, I believes
it is necessary for the FHFB to refrain from any effort otherwise to
rearrange the FHLBanks' investment framework, liquidity structure and
balance sheets.
It is my understanding that credit enhancement done through the
underwriting and reinsurance of the mortgage guaranty insurance after a
loan has been closed are secondary market transactions included in the
exemption for secondary market transactions in section 502(e)(1)(c) of
the S. 900 conference report.
Mr. MOAKLEY. Madam Speaker, I yield 2 minutes to the gentleman from
Minnesota (Mr. Vento).
(Mr. VENTO asked and was given permission to revise and extend his
remarks.)
Mr. VENTO. Madam Speaker, I rise in strong support of this rule. The
Committee on Rules, under the chairmanship of the gentleman from
California (Mr. Dreier) and the gentleman from Massachusetts (Mr.
Moakley), the ranking member, who have been able helpers in the
process, we could not be here today without the help that they have
offered in terms of melding together the bills in the House and for
their help and assistance in bringing this bill to the floor yesterday
and today.
This is a must-pass bill. We need to build the type of economic
foundation that will continue the economic progress that we have
experienced in our economy. The fact of the matter is that our
financial system in this country, in terms of banks, insurance,
securities, are dysfunctional today.
In this bill, led by the gentleman from Iowa (Chairman Leach) in the
House, we have been able to bring to the table the insurance interests
and the security interests and banking interests and literally make
them come to an agreement; and the same is true, of course, with the
regulators, bringing together Chairman Greenspan and Secretary Rubin
and now Secretary Summers, and others, and provide the type of
functional regulation that would satisfy the tough questions and
problems. So, too, in terms of consumer issues which are so important
to all of us to build the type of efficiencies and provide the type of
safeguards that the people deserve.
Now, I checked with the counsel for the House and the counsel for the
Senate and not a single consumer law is repealed in this bill. Quite
the contrary. In fact, CRA is strengthened by applying it to new
activities and applications. In fact, privacy, this is one of the most
pervasive privacy provisions ever written into Federal law and applies
to all financial entities.
Yet some today choose to build a facade of problems rather than
dealing with the reality and passing this important legislation. We
have the overwhelming support now in the Senate, overwhelming support
of the House, with nearly 350 Members that voted for this in the
initial instance and almost the same bill is being presented to today,
and, of course, the support of the administration.
I say it is time to pass this bill to provide the type of financial
efficiencies and consumer benefits that are inherent in a modern
financial system that is necessary for America's engine of economic
growth.
Madam Speaker, I rise in support of this rule that will bring before
the House in an expedited fashion the conference report on S. 900, the
Financial Services Modernization Act. This act, otherwise known as the
Gramm-Leach-Bliley act, is the culmination of many many years of effort
to bring the financial institutions and regulatory law in line with the
realities of today's marketplace.
Modernization of our financial services will finally be achieved with
the enactment of this key bill. With passage of this conference report,
Congress will enhance consumer protections in important ways, putting
forward the strongest financial privacy protection provisions ever to
be written into Federal law and

[[Page H11521]]

maintaining and reinvigorating the Community Reinvestment Act's
relevance in the new financial world.
This is a good compromise that reflects much of the House-passed bill
in content if not wholly in form. We repeal Glass-Steagall and allow
the affiliations with securities firms, insurance companies and banks.
The commercial ownership loophole is closed for unitary thrift holding
companies. We enhance the Federal Home Loan Bank System. We establish
consumer protections in law for the sales of non-deposit products by
banks. The financial privacy and CRA provisions are substantive,
substantial Federal policy advances. Importantly, the bill enhances the
viability of smaller community banks and financial entities vital to
extending services and credit through our greater economy: rural and
urban.
With regard to privacy, I well understand some sought greater
consumer privacy provisions. But the perfect should not be the enemy of
the good. This conference agreement lays a solid foundation of
financial privacy set into our regulated financial marketplace which
affects all consumers doing business with all banks, S&L's, insurance
companies, securities firms and credit unions and in fact, all entities
financial in nature: such as credit card companies and finance offices.
The broad basis for this provision is only beginning to be appreciated
and this privacy law is very much needed on that broad basis.
With regard to CRA, the conference successfully eliminated the
harmful ``safe harbor'' and ``small bank exemption'' provisions from
the Senate bill. We accepted a modified disclosure and reporting
system. While I strongly disagreed with the burdensome, so-called
``sunshine'' and reporting provisions in the Senate bill that raised
the specter of harassment of pro-CRA groups, very few would oppose
openness. Certainly, the disclosure of information can spell out the
effectiveness of these groups working so hard in our communities and
the effectiveness of the CRA itself.
I believe the reporting requirements, although improved, are an
extraordinarily difficult policy as structured in this measure. It no
doubt will be more of a burden to community groups and banks who
currently do not file reports. However, we were able to streamline the
reporting requirements and to limit who should file a report even as we
gave the regulators substantial authority to properly oversee such
provisions. We should be mindful of the administration's and
regulators' expressions of good will to take a common sense approach
with regards to its implementation. Hopefully they can help make these
disclosure and reporting requirements more workable. Congress will
certainly have to closely monitor the implementation of these
provisions and their effects.
With that, Madam Speaker, I urge an ``aye'' vote on the rule so that
we can positively consider one of the key financial services bills of
our century, the conference report on S. 900, the Financial Services
Modernization Act.
Mr. SESSIONS. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, as we can tell from the comments that have been made
on the floor tonight, this legislation is not only historic but has
required a great deal of work, a bipartisan work, and I am very proud
of the House of Representatives and the Congress that has done
something that is great for consumers.
It is hard work. We are hearing about it tonight. Just another
example of what great work this Congress has done.
Madam Speaker, I yield 2 minutes to the gentleman from Allentown,
Pennsylvania (Mr. Toomey), a member of the Committee on Banking and
Financial Services.
Mr. TOOMEY. Madam Speaker, I rise in support of this rule and the
legislation under consideration today. The Gramm-Leach-Bliley Financial
Services Modernization Act is probably the most important financial
legislation to come before Congress since the Glass-Steagall Act
mandated a separation between banking and the securities industry back
in 1933.
Today there is virtually unanimous agreement among economists,
academics, policymakers and most importantly the men and women actually
creating and providing financial services across America today. The
repeal of Glass-Steagall is necessary so that consumers can get the
products and services they desire and American financial firms can
compete in the global marketplace.
Madam Speaker, I would like to highlight just one small part of this
sweeping legislation. I am particularly pleased that this bill includes
an important provision regarding certain derivative transactions,
especially credit and equity swaps. These somewhat obscure products are
actually very important tools used by businesses, including financial
service firms, to manage a variety of risks that they face. This bill
reaffirms that swap contracts are legitimate bank products that can be
executed and booked in banks and are adequately regulated by and will
continue to be regulated by banking supervisors.
I would also like to congratulate the many Members of this Chamber
who have worked very hard, some for many years, on financial
modernization. In particular, I would like to salute the gentleman from
Iowa (Chairman Leach) and the ranking member, the gentleman from New
York (Mr. LaFalce) for the outstanding work they have done to see this
legislation through to completion, and I urge my colleagues to support
the rule and passage of this historic bill.
Mr. MOAKLEY. Madam Speaker, I yield 2 minutes to the gentleman from
Houston, Texas (Mr. Bentsen).
Mr. BENTSEN. Madam Speaker, as a member of the committee and the
conference committee, I strongly support this legislation and the rule
and urge my colleagues to support it. I believe that this comprehensive
banking reform legislation will bring new benefits to consumers by
encouraging competition among the banking securities and insurance
industries in creating one-stop shopping for consumers.
The United States' financial industry is the strongest and soundest
in the world today because of our dynamic market economy and strong
regulatory regime. Yet as the financial markets mature they have been
restrained by the Glass-Steagall law that requires financial companies
to separate their various entities.
By repealing Glass-Steagall, Congress will bring new competition to
financial services so that consumers can purchase products more
efficiently and more cheaply. The net effect will be to promote more
competition, create more products at lower prices and better protect
American consumers.
While the bill does not create the ideal financial holding company
model or charter, it does repeal portions of existing regulatory
constraints dating back to the Great Depression commensurate with a
market that has matured greatly through market disinterme- diation
brought on by broader consumer wealth, sophistication and access to
information.
This bill does not provide for the mixing of banking and commerce but
does address it in a prudent way through a new complimentary to banking
approach that should meet the concerns of not limiting banking and
finance as it expands.
It does allow for banks to enter the insurance and securities
brokerage business while protecting functional regulation and
maintaining the Securities and Exchange Act and McCarran-Ferguson.
Finally, I would like to say that this bill in many respects
strengthens the Community Reinvestment Act. It has for the first time
the ``have and maintain'' clause which says that any bank that wants to
get into any line of businesses must have and maintain a satisfactory
CRA rating.
Additionally, it protects CRA for smaller banks. It in no way
excludes or exempts smaller banks from CRA, which some members in the
other body tried to do.
I think this is really a win/win, and in terms of privacy, as other
speakers have said, this codifies new law as it relates to privacy. If
we do not pass this bill, consumers will be worse off as it relates to
privacy and I would encourage my colleagues to pass it.
Mr. SESSIONS. Madam Speaker, I yield 2 minutes to the gentleman from
Palm Bay, Florida (Mr. Weldon), a member of the Committee on Banking
and Financial Services.
Mr. WELDON of Florida. Madam Speaker, I thank the gentleman from
Texas (Mr. Sessions) for yielding me this time.
Madam Speaker, when I was first elected to Congress and later
appointed to serve on the Committee on Banking and Financial Services I
was very surprised to learn that the laws governing the financial
service sector of our economy were relics of the Depression, that the
Glass-Steagall Act was passed in 1933 and that for years the Congress
had been unable to pass important and badly needed new legislation to
modernize the laws governing the banking,

[[Page H11522]]

insurance and securities industries in the United States.
Well, tonight we are finally getting that job done and modernizing
those laws. This may not be a perfect bill but it is a good bill. It is
a good bill because it will make it easier and less expensive for the
public to access banking and financial services.
Our international competitors in Europe and Asia long ago adopted
more modernized changes to the laws governing their financial service
sectors. We now in the U.S. will have modernized ours, and in doing so
we will improve the competitiveness of the American economy and allow
it to continue its place as the most competitive economy on the globe.
Much credit goes to the gentleman from Iowa (Chairman Leach) and the
ranking member, the gentleman from New York (Mr. LaFalce) for this
bill, as well as all of the others who had significant input in this
effort, to include the Treasury Department and the Federal Reserve,
particularly Chairman Greenspan. I encourage all of my colleagues on
both sides of the aisle to vote yes on the rule and vote yes on final
passage of this legislation.
Mr. MOAKLEY. Madam Speaker, I yield 1\1/2\ minutes to the gentlewoman
from Rochester, New York (Ms. Slaughter).
Ms. SLAUGHTER. Madam Speaker, I thank the gentleman from
Massachusetts (Mr. Moakley) for yielding me time.
Madam Speaker, I have some strong concerns about the conference
report, but I do want to thank the conferees for including Section 733
entitled Fair Treatment for Women by Financial Advisors. This short but
important section, based on an amendment I brought to the floor, reads,
it is the sense of Congress that individuals offering financial advice
and products should offer such services and products in a
nondiscriminatory, nongender specific manner.
The language is in response to estate documents that keep women from
controlling their inherited financial assets. Some estate planning
publications and sales literature for trusts use three themes. One is
that women should be relieved of the burden of managing money because
they cannot learn. Second, if they have money on their hands they will
be vulnerable to shysters and, third, they might remarry and hand the
man's hard-earned money over to somebody else.
Now, this is not an old problem. In a 1998 estate planning guidebook
it instructs its benefactor to consider the question if, quote, a man
should subject his wife to the bewildering details which administration
of property often involves if she has had no experience with it.
It goes on to state that if she has had no previous experience she
may not be prepared to handle large sums of money. If this is true, she
herself would not want to be burdened with administration of property.
How kind of them to look out for protecting the wife.
It is past time that these outdated themes are addressed and
discriminatory financial practices are brought out in the open as we
move forward to modernize the rest of the financial services industry,
and it is my personal hope that this bill includes no bail-out
provisions should some of this go wrong in the future.
Mr. SESSIONS. Madam Speaker, I yield 2 minutes to the gentleman from
Des Moines, Iowa (Mr. Ganske).

{time} 2030

Mr. GANSKE. Madam Speaker, I rise in support of the rule and the
bill. I am particularly pleased that the unitary thrift loophole which
allows commercial firms to control savings and loans charters has been
closed in this bill.
Both Treasury Secretary Rubin and Federal Chairman Greenspan
testified in support of the provision to restrict unitaries. In his
Senate testimony, Greenspan stated, ``The Board supports the
elimination of the unitary thrift loophole, which currently allows any
type of commercial firm to control a federally insured depository
institution. Failure to close this loophole would allow the conflicts
inherent in banking and commerce combinations to further develop in our
economy and complicate efforts to create a fair and level playing field
for all financial services providers.''
What would be the result if Microsoft purchased Washington Mutual
with its 2,000 branches and $165 billion in assets? It certainly would
have raised the specter of too big to fail.
But, Madam Speaker, I especially want to commend the gentleman from
Iowa (Mr. Leach) for his patience and endurance in brokering this
agreement between members of the conference committee and in balancing
the interest of everyone, from small community banks and large
international insurance firms, to consumers and investors.
The challenge was to find equilibrium between maintaining safety and
soundness in the Nation's banking system and providing for a fair and
efficient competition in the financial services marketplace.
There are many who deserve a lot of credit for this bill. But at the
top in my book is the gentleman from Iowa (Chairman Leach). Iowans
should be very proud of the gentleman from Iowa (Chairman Leach) for
the work on this bill.
Mr. MOAKLEY. Madam Speaker, I yield 2 minutes to the gentleman from
Malden, Massachusetts (Mr. Markey).
Mr. MARKEY. Madam Speaker, I thank the gentleman from South Boston,
Massachusetts, for yielding me this time.
Madam Speaker, I rise in opposition to this bill. I support the
modernization of the financial services industry in the United States.
Because of global competition and rapid technological change, it is
critical that we update the laws which deal with every aspect of the
financial matters of the people of our country, but there is a fatal
flaw in the heart of this bill.
The financial institutions say that they need synergies of being able
to provide brokerage and banking and insurance services to every
American. As a result, they can be giving the American people no
privacy protections.
What the American people say is give us the synergies, but take the
``sin'' out of those synergies. Do not compromise our privacy. If one
has had one's checks in the same bank from the last 25 years, all of
those checks can now be shared with all the insurance agents inside of
this new financial services institution, with all of the brokers inside
of this financial institution, with the telemarketing affiliates of
this financial services institution to do a financial profile of one
for their marketing purposes. If this financial services company
creates a joint agreement with another financial services company, one
cannot protect that information either.
This is all one gets, Madam Speaker, from one's new, huge, bank
holding company: Notice. Notice is all one gets. What is the notice?
The notice is one has no privacy rights. That is the notice. None.
Because it interfere with their ability to make money at the expense of
one's family's secrets.
No one should vote for this bill. It is a fatally flawed bill. We
should be able to deal with this issue simultaneously with letting the
big boys get all they need. We should take care of what ordinary people
need for their families as well.
Mr. SESSIONS. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, thank goodness we have an open debate here tonight
where we are able to talk about the need for privacy rules and
regulation, the most comprehensive ever in the marketplace.
Madam Speaker, I yield 3 minutes to the gentleman from Brightwaters,
New York (Mr. Lazio), to help explain this a little bit further, a
member of the Committee on Banking and Financial Services and the
Committee on Commerce.
Mr. LAZIO. Madam Speaker, let me, first of all, begin by
complimenting the gentleman from Iowa (Mr. Leach), the chairman of the
Committee on Banking and Financial Services; the gentleman from New
York (Mr. LaFalce), the ranking Democratic member; the gentleman from
Ohio (Mr. Oxley), chairman of the Subcommittee on Finance and Hazardous
Materiels; and the gentlewoman from New Jersey (Mrs. Roukema); and the
gentleman from Virginia (Mr. Bliley) for their outstanding leadership
in getting this bill to the floor.
For 25 years, we have been working on this effort. Today we are on
the verge of making it a reality. For the

[[Page H11523]]

first time in history, we are going to require a financial institution
to actually have a privacy policy and to put it in plain English.
Madam Speaker, for years, we have been hearing about the trend of
global markets. Today globalization is the reality. Geographic borders
no longer block the flow of capital, creating a whole new world of
economic opportunity. The question is: Are we poised, are we prepared
to take advantage of this opportunity? Are we willing to embrace the
future? That is the question that is posed today. That is what the
Financial Services Modernization Act is designed to do.
Madam Speaker, rather, this bill will remove the red tape that
threatens to strangle our financial institutions as they enter the new
global marketplace.
Americans believe deeply in competition. They trust the free market.
Why? Because, year after year, competition brings more services, more
choice, lower prices, and more wealth.
Many financial conglomerates are already responding to their
customers' needs, offering a full menu of financial products and
services. But that does not mean that, when Glass-Steagall barriers are
torn down, every bank will be a broker or that every broker will be an
insurer.
Customers will gravitate to the best managed, lowest price financial
services provider. This legislation will give American companies the
freedom that they need to meet this challenge. It will give the freedom
to remain the world leading financial institution.
Madam Speaker, while I support this legislation strongly, I must
point out that it falls short in one important area. It does not
provide for a full two-way street for the securities industry to engage
in banking and so-called woofie provision. Woofies would have allowed
firms with institutional and corporate clients to provide those
customers with a full range of financial services without any
additional risk to the Federal Deposit Insurance System. I am
disappointed they were cut out of the conference report at the last
second.
Nevertheless, Madam Speaker, I strongly support this bill. It will
encourage competition in the financial services industry both here and
abroad. It will spur the creation of new financial instruments and new
markets to the benefit of consumers and businesses alike.
With that, I want to urge all of my colleagues to vote for this bill.
Let us make sure that American banking is ready for the 21st century.
Mr. MOAKLEY. Madam Speaker, I yield 2 minutes to the gentleman from
Wisconsin (Mr. Obey), the ranking member of the Committee on
Appropriations.
Mr. OBEY. Madam Speaker, this bill is consumer fraud masquerading as
financial reform. There is nothing wrong with modernizing financial
institutions. It is nice to see that my colleagues are going to try to
set up one-stop shopping services for financial services. But returning
1999 to 1929 is not reform in my book.
The proponents says they are making advances by providing privacy
protections. But the fact is the consumers are going to be faced with
the new megamerged world. Insurance companies, banks, and investment
companies are all going to be owned by the same people.
Supporters brag about consumer privacy rights that they are
protecting, and they are careful to say that they are providing
protection in the case of all unaffiliated third parties. That is true,
but big deal.
What they do not tell you is that they are giving away the privacy
store in terms of all affiliated parties. Because one is going to have
the same people owning one's banks, owning one's insurance company,
owning one's stock brokerages. That means they are going to share one's
banking information with every single affiliate, and they are going to
be able to contract with the telemarketers and spread that same
information around.
Sometimes this House makes me sick, and this is one of those nights.
Mr. SESSIONS. Madam Speaker, may I inquire as to the time remaining
for both sides.
The SPEAKER pro tempore (Mrs. Emerson). The gentleman from Texas (Mr.
Sessions) has 3 minutes remaining. The gentleman from Massachusetts
(Mr. Moakley) has 11\1/2\ minutes remaining.
Mr. SESSIONS. Madam Speaker, I reserve the balance of my time.
Mr. MOAKLEY. Madam Speaker, I yield 2 minutes to the gentlewoman from
California (Ms. Waters).
Ms. WATERS. Madam Speaker, I have spent hours on this bill. I served
on the conference committee. I am the ranking member of the
Subcommittee on Domestic and International Monetary Policy of the
Committee on Banking and Financial Services.
I have spent hours on this bill, and I am absolutely surprised that
the Members of this House can support a bill that would do what this
bill is about to do to working people and poor people.
We have something called CRA, Community Reinvestment Act. It is an
act that basically forces the banks to put something back into the
communities where they get deposits.
Now, there are those who have never liked CRA. They have winnowed
away at CRA every year. They have tried to dismantle it. The President
did away with all of the paperwork, because they said it was too much
paperwork. But that is not enough. They came back this time with
something called ``sunshine.''
Well, what they are doing is they are intimidating the activists.
They are intimidating them by making them do something called
disclosure and accountability and reporting. They are doing it in such
a way that they will discourage them from being activists. If they get
investigated and they fall short of the expectations, they will not be
able to be involved in this work for 10 years.
They know what they are doing. They want to get people out of the
business of challenging the banks. This is a one-man vendetta that took
place on the conference committee.
We should never have negotiated with them, but the negotiations took
place in the back room, not in public. Those who say that CRA has not
been weakened are wrong. It has been weakened.
Well, in addition to what has been done to CRA, the privacy provision
should cause one to hesitate on this bill. One's information will be
given to third parties. Do my colleagues know what they are? They are
boiler rooms where they hire people off the street to come in and do
telemarketing who are dialing to sell one something.
They are going to have all of one's information. They are going to
have one's bank account. They are going to have one's tax returns. They
are going to have everything. Privacy, CRA, fair housing, and the
people got nothing.
I tried to get lifeline banking. I said, let us have a study on the
escalating fees that banks are charging. I said, let us do something
about surcharging at ATMs. The consumers got nothing. We were voted
down on every attempt to do something for consumers. This is the big
boys' bill. This is the big banking bill. This is nothing for the
people.
Mr. MOAKLEY. Madam Speaker, I yield 2 minutes to the gentlewoman from
Florida (Mrs. Meek).
(Mrs. MEEK of Florida asked and was given permission to revise and
extend her remarks.)
Mrs. MEEK of Florida. Madam Speaker, I am sure that those of my
colleagues who have come to the floor and applauded this bill have
tunnel vision, and their vision is directed toward the large banking
institutions. Because their blindness does not let them see to the
right and left of them, they do not really see the people that are
being affected by this bill most.
I am opposed to this bill, that this bill brings in a strong element
of discrimination, particularly in fair housing. Fair housing is an
area I have fought for since the 1960s. We finally got a bit of fair
housing.
Now, they come in and say to these big conglomerates they are going
to let the insurance companies come in now; and they can do redlining,
and they do not care, because it is not within the big prospectus of
the bill.
But now it is going to be even harder for people to get a house. If
one cannot get insurance, I repeat, one cannot get a house. So what is
that other than discrimination?
The CRA language in this bill may have been worked on to some extent.
But my colleagues were not able to see the forest through the trees.
Then they limited it, and they thought they were

[[Page H11524]]

expanding it; but they limited it by protecting the banks.
Now, do not let anybody fool you, the banks have made a lot of money.
They have gone into these neighborhoods, and they have been able to
help in those neighborhoods. But what my colleagues are doing now is
they are letting other players into this ball game. These other players
may or may not have the kind of outlook on these problems as banks do.
So they are saying that is okay because it does not involve us. But
it does involve you in that, if you do not expand it, you are not going
to be able to capitalize on the gains you have been made through the
community reenactment.
Now, I know my colleagues do not like CRA. I have come from
neighborhoods where CRA is sort of like a bad word, like some kind of
plague on us. But my colleagues must go back to the fight they are
supporting and putting severe penalties on these groups, make it hard
for them to fill out the paperwork, do not punish the banks, make it
hard for these poor little community-based groups to fill them out,
then bang them over the head with some big propensity for the Federal
Government to come in on it.
You are talking about keeping the Federal Government off your backs.
You put it on the backs of poor people. Shame on you.
Madam Speaker, I rise in opposition to the Conference Report because
it weakens the Community Reinvestment Act when we should be
strengthening and expanding it. Clearly, there is a need to modernize
and update this nation's banking and financial services laws.
Nonetheless, because the CRA provisions are flawed and have gotten
worse since leaving the House, I cannot support this bill.
Madam Speaker, the CRA has brought economic development, hope, and
opportunity to low and moderate income communities in urban and rural
areas across the country. The CRA has been the primary vehicle to
expand access to capital and credit in my District and in other low
income and minority communities throughout the country.
CRA was created to combat discrimination by encouraging federally
insured financial institutions to meet the credit needs of the
communities they serve. CRA requires federally insured banks to seek
business opportunities in poor areas.
Since its enactment in 1977, financial institutions have made more
than $1 trillion in loans in low income communities, more than 90% of
them in the past seven years. As a result, neighborhoods have improved
as more residents have been able to buy homes and more small businesses
have succeeded. The CRA has been an enormous success.
We should be expanding the reach of the CRA, not restricting it.
Unfortunately, the Conference Report moves in the wrong direction on
CRA. It fails to adequately protect and promote access to capital and
credit and fails to capitalize on our opportunity to expand the CRA.
While the CRA language in the Conference Report clearly is an
improvement over the language in the bill passed by the Senate, the
conference report language in fundamentally flawed. The conference
report eliminates the requirement that financial holding companies
maintain compliance with the CRA. It limits CRA oversight of banks and
thrifts by severely reducing the frequency of CRA exams for most urban
and rural banks with assets of under $250 million. It imposes
unnecessary and highly burdensome reporting requirements on community
groups that are parties to CRA agreements with banks and imposes severe
penalties on the community groups for non-compliance.
The bill significantly extends the time between CRA exams for small
banks, allowing such banks to take full advantage of all of the new
powers under the banking bill even if their performance in low-income
areas declines dramatically during this period. It also fails to
protect customers of banks owned by insurance companies from illegal
discrimination. Under the bill, insurance companies found guilty of
violating the Fair Housing Act are not prohibited from affiliating with
banks, even though their insurance agents may become the salespeople
for these new bank affiliates.
Madam Speaker, as we seek to modernize the financial services
industry, we must not miss this unique opportunity to modernize the
Community Reinvestment Act. We need a bill that creates a financial
system that works for all Americans. For main street, not just wall
street. For these reasons, I oppose the Conference Report.
Mr. SESSIONS. Madam Speaker, I yield 1 minute to the gentleman from
Louisiana (Mr. Baker).

{time} 2045

Mr. BAKER. Madam Speaker, I thank the gentleman for yielding me this
time.
I think some folks have really missed the boat tonight. If my
colleagues do not want privacy restrictions, then vote against this
bill. The first Federal privacy statute ever. Who does it apply to?
Banks, insurance agents, securities companies.
Does it apply to Wal-Mart? Does it apply to General Motors? Does it
apply to anyone else in the world? No. For the first time it applies to
financial institutions and financial in nature only. They cannot sell
an individuals' private information, without that individual's
permission, to a third party.
Some people wanted to go further. They wanted to really shut it down.
They wanted to make sure credit unions could not do their work behind
the counter by contracting with third parties to handle their check-
clearing processes. If my colleagues want to go further, fine, deal
with the credit unions and small banks of this country and tell them
they cannot do their business any longer.
I think some people have missed it. Big bank bill? This bill, for the
first time, provides 15-year fixed rate interest rate loans for small
businesses, rural, and agricultural communities through small hometown
banks. Small banks shut down Wal-Mart. If my colleagues want to make
sure Wal-Mart in your town soon, running the hardware department,
running the tire department, running the frozen food department, and,
yes, running your local bank, vote against this bill. Because there is
a loophole that has been shut down that would allow Wal-Mart coming
soon to your hometown to run your bank.
Small bank? Consumer? This bill is it. I cannot imagine what my
colleagues are thinking.
Mr. MOAKLEY. Madam Speaker, I yield 2 minutes to the gentlewoman from
Ohio (Ms. Kaptur).
Ms. KAPTUR. Madam Speaker, I rise in opposition to the rule and in
opposition, strong opposition, to the bill.
This bill is pro megabank and it is against consumers. And I would
say to the people listening tonight, Are you tired of calling banks and
getting lost in the automated phone system, never locating a breathing
human being? This bill will make it worse.
Are you fed up with rising ATM fees and service fees that now average
over $200 a year per account holder? This bill will make it worse.
Are you skeptical about banks that used to be dedicated to safety and
soundness and savings but are now switching to pushing stocks and
insurance and debt? This bill will make it worse.
Are you tired of the megafinancial conglomerates and mergers that
have made your community a branch economy of financial centers located
far away, whose officers you never know, who never come to your
community? This bill will make it worse.
Punitive reporting requirements in this bill are aimed at disabling
community groups that are the only groups in this country that hold
these institutions accountable for the depositors' money. It is going
to make them a target of Federal reporting requirements.
So why do community groups oppose this bill, like the Lutheran Office
for Governmental Affairs, the Fair Housing Alliance, the National Low-
Income Housing Coalition, the Coalition of Community Development
Financial Institutions, Consumers Union, the Volunteers of America?
Sounds like the folks that live in my neighborhood, my colleagues.
I would say this is one of the worst-conceived bills ever to come
before this body, simply because it does not pay attention to the
majority of the American people who have, on average, less than $2,000
in any financial institution in this country.
To anyone listening tonight I say, Put your money in the credit
unions. They are owned by you and they will take care of you. Vote
against this bill.

Announcement by the Speaker Pro Tempore

The SPEAKER pro tempore (Mrs. Emerson). The Chair must remind Members
that under the rules of the House, remarks in debate should be directed
to the Chair and not to others, outside the chamber, in the second
person.
Mr. SESSIONS. Madam Speaker, I yield 1 minute to the gentleman from

[[Page H11525]]

Salt Lake City, Utah (Mr. Cook), a member of the Committee on Banking
and Financial Services.
Mr. COOK. I thank my colleague from Texas for yielding the time, and
I want to say, Madam Speaker, that I rise in support of this bill and
thank the Committee on Rules, the Committee on Commerce, and my
chairman, the gentleman from Iowa (Mr. Leach), along with my other
Committee on Banking and Financial Services colleagues for their
tireless efforts to create a rational and balanced structure to bring
our country's financial services finally into the 21st century.
I commend the conference committee for their agreement on the
delicate compromise, ensuring adequate consumer privacy protections and
reinforcing important CRA provisions. The enormous benefits to the
economy and consumers of financial services will be seen for years to
come.
This legislation is long overdue and quite historic. Modernizing the
regulation of the U.S. financial services industry is a landmark
opportunity for this Congress to prove that we are dedicated to
providing individuals and businesses with lower costs and greater
convenience, ensuring that the U.S. remains the economic global leader.
I urge my colleagues to join me in support of the rule and final
passage.
Mr. MOAKLEY. Madam Speaker, I yield 1 minute to the gentlewoman from
New York (Mrs. Maloney).
Mrs. MALONEY of New York. Madam Speaker, I rise in support of the
rule and the bill. After 66 years, it is time for Congress to retire
Glass-Steagall. The markets already have.
Today's current confused state of financial services law is not the
result of any policy decision by Congress, rather it is the result of
chipping away at Glass-Steagall by unelected regulators and court
decisions.
The legislation before us will bring order to the law, to reflect the
reality of today's financial markets. Advances in technology are
presenting financial companies with new opportunities to better serve
their customers here at home and to compete for business around the
world. Without congressional action establishing a consistent legal
framework in the United States, we risk losing international
opportunities to other nations.
While on the whole I believe the Gramm-Leach-Bliley act promotes
needed legal consistency and makes United States companies more
competitive, it could have been improved in several areas.
I supported stronger CRA and privacy provisions than those in the
bill before us; but, overall, I support this bill and I urge a ``yes''
vote.
Mr. MOAKLEY. Madam Speaker, I yield 1 minute to the gentlewoman from
Oregon (Ms. Hooley).
Ms. HOOLEY of Oregon. Madam Speaker, I rise in support of the rule
and the bill.
Many of my colleagues are concerned that this bill does not enact
strong enough privacy protection for consumers, and I would like to
address some of those concerns. Current law, today, current law
provides no protection for consumers' financial privacy. None. Zero.
Zip. A bank under current law can sell personal financial information
to whomever they want, whenever they want, and however they want. They
can even sell a customer's account number. There is nothing a customer
can do.
With the enactment of this legislation, for the first time ever,
companies will be required to fully disclose how customer information
will be used; and for the first time ever, companies will have to allow
consumers to say no to the sharing of personal information with third
parties.
Could we have done better? Absolutely. But this is a step in the
right direction. Today, we have the opportunity to enact a bill with
new privacy protections.
Madam Speaker, I would also like to thank the ranking member, the
gentleman from New York (Mr. LaFalce), and the chairman, the gentleman
from Iowa (Mr. Leach) for the wonderful leadership they have shown, and
I urge support of this rule and the bill.
Mr. MOAKLEY. Madam Speaker I yield 1 minute to the gentleman from
Washington (Mr. Inslee).
(Mr. INSLEE asked and was given permission to revise and extend his
remarks.)
Mr. INSLEE. Madam Speaker, I too want to compliment the gentleman
from New York (Mr. LaFalce) and the gentleman from Iowa (Mr. Leach) for
their work on this bill. They both showed courtesy and professionalism.
But I must speak against this bill, because the way this bill is
written tonight it is a clear and present danger to the existing
privacy rights of America. This bill is the single greatest threat to
Americans' basic and fundamental privacy interests of any legislation,
considered by any legislative body in America, ever.
The reason is, and I want my colleagues to imagine this, because this
is what is going to happen if this bill becomes law. When these mega-
affiliates are allowed to exist, what is going to happen is our bank
accounts, the first time we happen to get $5,000 cash in our bank
accounts, a computer will spit that information out to the affiliated
stock broker who will call us at 7 o'clock at night and try to sell us
hotstock.com stock. And the second thing that will happen is every
single check we have written is going to go to the affiliated life
insurance company so they can profile our life-style to decide whether
to sell us life insurance.
We are going backwards on privacy. We are creating a new organism.
These affiliates will threaten our privacy. We should reject this bill.
Mr. MOAKLEY. Madam Speaker, I yield 1 minute to the gentlewoman from
Texas (Ms. Jackson-Lee).
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Madam Speaker, I thank the gentleman from
Massachusetts for yielding me this time, and I rise to support the rule
and to support this bill.
This is not the best bill that we could have had. There are many
problems with this bill. But this bill has been long in coming. And I
want to thank those who fought hard and fought long for some of the
provisions covering the Community Reinvestment Act provisions.
CRA, the Community Reinvestment Act, works in my community. The
Tejano Center for Community Concerns was able to build some 15 homes
and build a school for high school dropouts. But we have not gone far
enough. I believe we should come back to the floor of the House and
deal with the sunshine provisions and, yes, I believe that the
reporting provisions dealing with smaller banks should be addressed
again as well.
I think the President of the United States needs to join this
Congress in the need for a privacy bill and he should sign a
freestanding privacy bill. Because, although we have a study that
determines whether or not a consumer's privacy will be violated, we do
need a freestanding privacy bill to ensure that the privacy of
Americans will truly be protected.
But I am pleased that there is no discrimination against those who
have suffered domestic violence if they seek credit opportunities and I
am further pleased that there is protection for women who are seeking
access to credit sources; and I also am delighted to see that there is
a provision that deals with defermining whether there is a malicious
securing of the financial records of consumers thereby violating a
consumer's privacy. It is not a perfect bill, but it is a bill that we
should vote for and create new opportunities for all Americans.
Mr. MOAKLEY. Madam Speaker, will the Chair inform us of the remaining
time for both sides?
The SPEAKER pro tempore. The gentleman from Massachusetts (Mr.
Moakley) has 1\1/2\ minutes remaining, and the gentleman from Texas
(Mr. Sessions) has 1 minute remaining.
Mr. MOAKLEY. Madam Speaker, I yield the balance of my time to the
gentleman from New York (Mr. Hinchey).
Mr. HINCHEY. Madam Speaker, one thing about this rule is, it is
consistent with the bill. I will have an opportunity to speak against
the bill shortly, but the rule itself is totally consistent with the
bill. The rule is unfair as the bill is unfair.
We have 1 hour to debate the most comprehensive change in financial
services legislation in the Nation in the last 65 years. This is one of
the most important bills to come before this Congress in decades, and
we are going to spend 1 hour this evening debating here on the floor of
the House of Representatives.

[[Page H11526]]

And that 1 hour is divided thusly: two-thirds of that hour go to the
people who are for the bill; only one-third of the hour goes to the
people who are opposed to it. That is wholly consistent with the
objectivity and fairness contained within the bill itself.
This is a farce, it is a mistake, it is a day that we will rue. We
are constructing here an apparatus that will come back and bite us
severely.

{time} 2100

This country will suffer from it. Untold millions of our citizens
will suffer from the contents of this bill. We will look back on the
way we debated it, the short shrift we gave to the consideration of all
the momentous consequences of this bill and the unfairness with which
we allocated the time and we will regret it. We will regret it, the
public policy point of view and politically. This is a big, serious
mistake.
Mr. SESSIONS. Madam Speaker, I yield 1 minute to the gentleman from
Henderson, Tennessee (Mr. Bryant).
Mr. BRYANT. Madam Speaker, I thank the gentleman from Texas for
yielding me the time.
Madam Speaker, I rise in strong support of this rule and S. 900,
which passed the other body today by a vote of 90-8.
Although this legislation addresses the needs of the financial
community, consumers are the big winners. If we pass this conference
report, consumers will be able to open a checking account, secure a
retirement plan, purchase an insurance policy, and make investments all
with one company without having to go to several different financial
services companies.
Our rural communities will benefit from the provisions to reform the
Federal Home Loan Bank. This provision gives small banks greater access
to funds for making loans to small businesses and small farmers while
establishing an improved capital structure for the system.
I urge my colleagues to join together to vote for this bill and this
conference report to move the financial services industry forward and
give our consumers the choices they need in today's world.

General Leave

Mr. SESSIONS. Madam Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and to include extraneous material on H. Res. 355.
The SPEAKER pro tempore (Mrs. Emerson). Is there objection to the
request of the gentleman from Texas?
There was no objection.
Mr. SESSIONS. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, I urge support of this fair rule for the hard work
that has taken place during this year of the 106th Congress.
Madam Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The previous question was ordered.
The SPEAKER pro tempore. The question is on the resolution.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.

Recorded Vote

Mr. SESSIONS. Madam Speaker, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 335,
noes 79, not voting 20, as follows:

[Roll No. 569]

AYES--335

Aderholt
Allen
Archer
Armey
Bachus
Baird
Baker
Baldacci
Ballenger
Barcia
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bentsen
Berkley
Berman
Berry
Biggert
Bilbray
Bilirakis
Bishop
Bliley
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Bono
Borski
Boswell
Boucher
Boyd
Brady (TX)
Brown (OH)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Cannon
Capps
Cardin
Castle
Chabot
Chambliss
Chenoweth-Hage
Clayton
Clement
Clyburn
Coble
Coburn
Collins
Combest
Cook
Cooksey
Cox
Cramer
Crowley
Cubin
Cunningham
Davis (FL)
Davis (VA)
Deal
DeGette
DeLauro
DeLay
DeMint
Deutsch
Diaz-Balart
Dicks
Doggett
Dooley
Doolittle
Doyle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Everett
Ewing
Fletcher
Foley
Forbes
Ford
Fossella
Fowler
Franks (NJ)
Frelinghuysen
Frost
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Green (TX)
Green (WI)
Greenwood
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (IN)
Hill (MT)
Hilleary
Hilliard
Hinojosa
Hobson
Hoeffel
Hoekstra
Holden
Holt
Hooley
Horn
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Istook
Jackson-Lee (TX)
Jenkins
John
Johnson (CT)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Kasich
Kelly
Kind (WI)
King (NY)
Kingston
Kleczka
Klink
Knollenberg
Kolbe
Kuykendall
LaFalce
LaHood
Lampson
Largent
Latham
LaTourette
Lazio
Leach
Levin
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lowey
Lucas (KY)
Lucas (OK)
Maloney (CT)
Maloney (NY)
Manzullo
Martinez
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McCrery
McGovern
McHugh
McIntosh
McIntyre
McKeon
McNulty
Meehan
Menendez
Metcalf
Mica
Miller (FL)
Miller, Gary
Minge
Moakley
Moore
Moran (KS)
Moran (VA)
Morella
Murtha
Myrick
Nadler
Napolitano
Neal
Nethercutt
Ney
Northup
Nussle
Olver
Ortiz
Ose
Oxley
Packard
Pallone
Pascrell
Pastor
Pease
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pickett
Pitts
Pombo
Pomeroy
Porter
Portman
Price (NC)
Pryce (OH)
Quinn
Radanovich
Rahall
Ramstad
Rangel
Regula
Reyes
Reynolds
Riley
Rodriguez
Roemer
Rogers
Rohrabacher
Ros-Lehtinen
Rothman
Roukema
Royce
Ryan (WI)
Ryun (KS)
Sabo
Sandlin
Sanford
Sawyer
Saxton
Schaffer
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherman
Sherwood
Shimkus
Shows
Simpson
Sisisky
Skeen
Skelton
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Souder
Spence
Spratt
Stabenow
Stenholm
Strickland
Stump
Stupak
Sununu
Sweeney
Talent
Tancredo
Tanner
Tauscher
Tauzin
Terry
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Thune
Tiahrt
Toomey
Towns
Traficant
Turner
Upton
Velazquez
Vento
Vitter
Walden
Walsh
Wamp
Watkins
Watts (OK)
Weiner
Weldon (FL)
Weldon (PA)
Weller
Wexler
Weygand
Whitfield
Wicker
Wilson
Wise
Wolf
Wynn
Young (AK)
Young (FL)

NOES--79

Abercrombie
Ackerman
Andrews
Baldwin
Barrett (WI)
Becerra
Blagojevich
Brady (PA)
Brown (FL)
Capuano
Carson
Clay
Condit
Conyers
Costello
Coyne
Cummings
Danner
Davis (IL)
DeFazio
Delahunt
Dingell
Dixon
Edwards
Evans
Farr
Fattah
Filner
Gejdenson
Gutierrez
Hastings (FL)
Hinchey
Inslee
Jackson (IL)
Jefferson
Jones (OH)
Kaptur
Kildee
Kilpatrick
Kucinich
Lantos
Lee
Lewis (GA)
Lipinski
Lofgren
Luther
Markey
McDermott
McKinney
Meek (FL)
Meeks (NY)
Millender-McDonald
Miller, George
Mink
Oberstar
Obey
Owens
Payne
Pelosi
Phelps
Rivers
Roybal-Allard
Rush
Sanchez
Sanders
Schakowsky
Scott
Serrano
Slaughter
Taylor (MS)
Thurman
Tierney
Udall (NM)
Visclosky
Waters
Watt (NC)
Waxman
Woolsey
Wu

NOT VOTING--20

Bereuter
Crane
Dickey
Frank (MA)
Gephardt
Kanjorski
Kennedy
Larson
McInnis
Mollohan
Norwood
Paul
Rogan
Salmon
Scarborough
Shuster
Stark
Stearns
Taylor (NC)
Udall (CO)

{time} 2125

Mr. GEJDENSON and Mr. FATTAH changed their vote from ``aye'' to
``no.''
Mr. HILLIARD changed his vote from ``no'' to ``aye.''
So the resolution was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.

{time} 2130

Mr. LEACH. Madam Speaker, pursuant to House Resolution 355, I call up
the conference report to accompany the Senate bill (S. 900) to enhance
competition in the financial services industry by providing a
prudential framework for the affiliation of banks, securities firms,
insurance companies, and for other financial service providers, and for
other purposes.

[[Page H11527]]

The Clerk read the title of the Senate bill.
The SPEAKER pro tempore (Mrs. Emerson). Pursuant to House Resolution
355, the conference report is considered as having been read.
(For conference report and statement, see proceedings of the House of
Tuesday, November 2, 1999, at page H11255.)
The SPEAKER pro tempore (Mrs. Emerson). The gentleman from Iowa (Mr.
Leach) and the gentleman from New York (Mr. LaFalce) each will control
30 minutes.
Mr. DINGELL. I rise to inquire, Madam Speaker, if my good friend, the
gentleman from New York (Mr. LaFalce) or the gentleman from Minnesota
(Mr. Vento), who is claiming time in opposition to the bill is in fact
opposed to the bill.
The SPEAKER pro tempore. Is the gentleman from New York (Mr. LaFalce)
in favor of the conference report?
Mr. LaFALCE. I am strongly in favor of the conference report.
The SPEAKER pro tempore. For that reason, pursuant to clause 8(d)(2)
of rule XXII, the gentleman from Iowa (Mr. Leach), the gentleman from
New York (Mr. LaFalce), and the gentleman from Michigan (Mr. Dingell)
each will control 20 minutes.
Mr. DINGELL. Madam Speaker, I rise to claim time in opposition to the
legislation.
The SPEAKER pro tempore. The Chair will recognize the gentleman from
Michigan (Mr. Dingell) for 20 minutes as part of the debate.
The Chair recognizes the gentleman from Iowa (Mr. Leach).
Mr. LEACH. Madam Speaker, I ask unanimous consent to divide the time
that I have been authorized in half and share it with the gentleman
from Virginia (Mr. Bliley), the distinguished chairman of the Committee
on Commerce.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Iowa?
There was no objection.
(Mr. LEACH asked and was given permission to revise and extend his
remarks.)
Mr. LEACH. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, yes, this is a historic day. If the House follows the
Senate lead where on a 90 to 8 vote this conference report was adopted
earlier today, the landscape for delivery of financial services will
shift. American commerce will be made more competitive, and the
American consumer will be better served.
Under current law, financial institutions, banks, insurance
companies, securities firms, are constrained in market niches. Under
the new legislative framework, each industry will be allowed to compete
head to head with a complete range of products and services.
Over the decades, modernization approaches have been offered many
times in many ways. The particular approach taken by the committees of
jurisdiction is one based upon the following premises: 1, that no parts
of America, whether an inner city or rural hamlet, should be denied
access to credit; 2, that in a free market economy, expanding
competition and finance should increase consumer access to a wider
variety of products at the most affordable prices; 3, that while
competition should be opened up in finance, the American model of
separating commerce from banking should be maintained; 4, the privacy
protections of American consumers should be expanded in unprecedented
ways; 5, that the public protections contained in the prudential
regulatory regime should be rationalized and made stronger; 6, that the
international competitiveness of American firms should be bolstered.
These are the premises and the effects of this legislation. If there
is an institutional tilt to the balanced approach taken in this bill,
it is to and for smaller institutions. In a David and Goliath
competitive world, this legislation is the community bankers' and
independent insurance agents' slingshot. They and the customers they
serve will be empowered to a greater extent than under the status quo
or any alternative modernization approach.
Madam Speaker, I would simply conclude by expressing gratitude to all
the participants in this process, particularly my friends, the
gentleman from New York (Mr. LaFalce) and the gentleman from Minnesota
(Mr. Vento), their Senate counterpart, Paul Sarbanes; the gentleman
from Virginia (Mr. Bliley) and the gentleman from Ohio (Mr. Oxley) for
their leadership in the Committee on Commerce, and the gentleman from
Michigan (Mr. Dingell) and the gentleman from Massachusetts (Mr.
Markey) for their constructive dissent.
In the Committee on Banking and Financial Services, I am particularly
grateful for the patience of so many Members, but I am obligated to
cite in particular the wisdom and choice counsel of the vice chairman,
the gentleman from Florida (Mr. McCollum), and an exceptionally strong
team of advice the gentleman from Louisiana (Chairman Baker), the
gentlewoman from New Jersey (Mrs. Roukema), the gentleman from Alabama
(Mr. Bachus), the gentlemen from New York (Mr. Lazio and Mr. King). To
them I express great personal gratitude for help, and profound
apologies where I have differed or could not help them.
As only Members understand, Congress has many dimensions, and this
bill would not have been made possible without the input of a
thoroughly professional staff. At the risk of oversight, let me thank
on behalf of the House Tony Cole, Gary Parker, Laurie Schaffer, Jim
Clinger, John Butler, John Land, Natalie Nguyen, Alison Watson, David
Cavicke, Jeanne Roslanowick, and our counsels at the Legislative
Counsel's office Jim Wert and Steve Cope.
I would also like to express appreciation for the contributions of
Virgil Mattingly of the Federal Reserve, Harvey Goldschmidt of the SEC,
Undersecretary Gensler of the Treasury, Jerry Hawke, our comptroller,
and Donna Tanoue, chair of the FDIC.
Let me also make a comment about process. This bill has been led in
the Senate by an extraordinarily strong chairman, Phil Gramm of Texas.
While the House approach has differed somewhat with that of the Senate,
the big picture is that the Senate acted decisively in a timely manner
in legislation, the framework for which has been close to and is now
identical with that offered this evening to the House. Each side has
moved to the other, and the end product is overwhelmingly in the public
interest.
It has been my view from the beginning of consideration of financial
reform several Congresses back that few legislative efforts require
more bipartisan and biinstitutional cooperation than this one. The need
for a cooperative approach has become more self-evident as issues of
the day have become more personalized and partisan.
In this light, I would like to thank the minority as well as the
majority leadership of the House, Secretary Summers as well as Chairman
Greenspan and Chairman Levitt, for their profound contributions to this
legislation. It is truly bipartisan, supported by the executive branch
and the Federal Reserve.
Madam Speaker, the legislation before the House is historic win-win-
win legislation, updating America's financial services system for the
21st Century.
It's a win for consumers who will benefit from more convenient and
less expensive financial services, from major consumer protection
provisions and from the strongest privacy protections ever considered
by the Congress.
It's a win for the American economy by modernizing the financial
services industry and saving an estimated $18 billion annually in
unnecessary costs.
And, it's a win for America's competitive position internationally by
allowing U.S. companies to compete more effectively for business around
the world and create more financial services jobs for Americans.
It would be an understatement to say that this has not been an easy,
nor a quickly-produced piece of legislation to bring before the House.
For many of the 66 years since the Congress enacted the Glass-
Steagall Act in 1933 to separate commercial banking from investment
banking, there have been proposals to repeal the act. The Senate has
thrice passed repeal legislation and last year the House approved the
105th Congress version of H.R. 10.
The bill before us today is the result of months and months of tough
negotiation and compromise: among different congressional committees,
different political parties, different industrial groupings and
different regulators. No single individual or group got all--or even
most--of what it wanted. Equity and the public interest have prevailed.

[[Page H11528]]

It should be remembered that while the work of Congress inevitably
involves adjudicating regulatory turf battles or refereeing industrial
groups fighting for their piece of the pie, the principal work of
Congress is the work of the people--to ensure that citizens have access
to the widest range of products at the lowest possible price; that
taxpayers are not put at risk; that large institutions are able to
compete against their larger international rivals; and that small
institutions can compete effectively against big ones.
We address this legislation in the shadow of major, ongoing changes
in the financial services sector, largely the result of technological
innovations and decisions by the courts and regulators, who have
stepped forward in place of Congress. Many of us have concern about
certain trends in finance. Whether one likes or dislikes what is
happening in the marketplace, the key is to ensure that there is fair
competition among industry groups and protection for consumers. In this
regard, this bill provides for functional regulation with state and
federal bank regulators overseeing banking activities, state and
federal securities regulators governing securities activities and the
state insurance commissioners looking over the operations of insurance
companies and sales.

The benefits to consumers in this bill cannot be stressed more.
First, they will gain in improved convenience. This bill allows for
one-stop shopping for financial services with banking, insurance and
securities activities being available under one roof.
Second, consumers will benefit from increased competition and the
price advantages that competition produces.
Third, there are increased protections on insurance and securities
sales and a required disclosure on ATM machines and screens of bank
fees.
Fourth, the Federal Home Loan Bank reform provisions expand the
availability of credit to farmers and small businesses.
Fifth, the bill also contains important consumer privacy protections.
Among other things, the bill:
1. Bars financial institutions--including banks, savings and loans,
credit unions, securities firms and insurance companies--from
disclosing customer account numbers or access codes to unaffiliated
third parties for telemarketing or other direct marketing purposes.
2. Enables customers of financial institutions, for the first time,
to ``opt out'' of having their personal financial information shared
with unaffiliated third parties, subject to certain exceptions related
largely to the processing of customer transactions. A financial
institution would be permitted to share information with an
unaffiliated third party to perform services or functions on behalf of
the financial institution and to enter into certain joint marketing
arrangements for financial products or services, as long as the
institution fully discloses such activity to its customers and enters
into a contractual agreement requiring the third party to maintain the
confidentiality of any such information.
3. Requires all financial institutions to disclose annually to all
customers, in clear and conspicuous terms, its policies and procedures
for protecting customers' nonpublic personal information, including its
policies and practices regarding the disclosure of information to both
non-affiliated third parties and affiliated entities.
4. Directs relevant Federal and State regulators to establish
comprehensive standards for ensuring the security and confidentiality
of consumers' personal information maintained by financial
institutions, and to protect against unauthorized access to or use of
such information.
5. Accords supremacy to State laws that give consumers greater
privacy protections than the provisions in the Act.
6. Makes it a federal crime, punishable by up to five years in
prison, to obtain or attempt to obtain private customer financial
information through fraudulent or deceptive means. Such means could
include misrepresenting the identity of the person requesting the
information or otherwise tricking an institution or customer into
making unwitting disclosures of such information.
In terms of enforcement, the Act subjects financial institutions that
violate the new consumer privacy protections to a wide range of
possible sanctions, including: Termination of FDIC insurance;
implementation of Cease and Desist Orders barring policies or practices
deemed violations of the Act's privacy provisions; removal of
institution-affiliated parties, including bank directors and officers,
from their positions, and permanent exclusion of such parties from
further employment in the banking industry; and civil money penalties
of up to $1,000,000 for an individual or the lesser of $1,000,000 or 1%
of the total assets of the financial institution.
The other major beneficiaries of this legislation are America's small
community financial institutions. In this regard, I'd like to emphasize
the philosophic underpinnings of this legislation. Americans have long
held concerns about bigness in the economy. As we have seen in other
countries, concentration of economic power does not automatically lead
to increased competition, innovation or customer service.
But the solution to the problem of concentration of economic power is
to empower our smaller financial institutions to compete against large
institutions, combining the new powers granted in this legislation with
their personal service and local knowledge in order to maintain and
increase their market share.
For many communities, retaining their local, independent bank depends
upon granting that bank the power to compete against mega-giants which
are being formed under the current regulatory and legal framework.
The conference report provides community banks with the tools to
compete, not only against large mega-banks but also against new
technologies such as Internet banking. Banks which stick with offering
the same old accounts and services in the same old ways will find their
viability threatened. Those that innovate and adapt under the
provisions of this bill will be extraordinarily well positioned to grow
and serve their customer base.
Large financial institutions can already offer a variety of services.
But community banks are usually not large enough to utilize legal
loopholes like Section 20 affiliates or the creation of a unitary
thrift holding company to which large financial institutions--
commercial as well as financial--have turned.
One of the most controversial provisions prohibits commercial
entities from establishing thrifts in the future and allows for those
commercially owned thrifts currently in existence to be sold only
within the financial community, the same rules which apply to banks.
The reason this restriction on commerce and banking is being expanded
is several fold. First, savings associations that once were exclusively
devoted to providing housing loans, have become more like banks,
devoting more of their assets to consumer and commercial loans. Hence,
the appropriateness for comparability between the commercial bank and
thrift charter is self-evident.
Second, this provision must be viewed in light of the history of past
legislative efforts affecting the banking and thrift industries. The
S&L industry has tapped the U.S Treasury for $140 billion to clean up
the 1980s S&L crisis. In 1996, savings associations received a multi-
billion dollar tax break to facilitate their conversion to a bank
charter. Also, in 1996, the S&Ls tapped the banking industry for $6 to
$7 billion to help pay over the next 30 years for their FICO
obligations, that part or the S&L bailout costs that remained with the
thrift industry.
During this time period, Congress has liberalized the qualified
thrift lender test and the restrictions on the Federal savings
association charter. These legislative changes are in addition to the
numerous advantages that the industry has historically enjoyed, such as
the broad preemption rights over state laws and more liberal branching
laws.
The conference report continues the Congressional grant of benefits
to the thrift industry by repealing the SAIF special reserve, providing
voluntary membership by Federal savings associations in the Federal
Home Loan Bank System, allowing state thrifts to keep the term
``Federal'' in their names, and allowing mutual S&L holding companies
to engage in the same activities as stock S&L holding companies.
Opponents of this provision correctly argue that commercial companies
that have acquired thrifts (so-called unitary thrift holding companies)
before and after the S&L debacles of the 1980s have not, for the most
part, caused taxpayer losses. However, the Federal deposit insurance
fund that was bailed out by the taxpayers covered the entire thrift
industry including the unitary thrift holding companies, and the $6 to
$7 billion of thrift industry liabilities that were transferred to the
commercial banking industry benefited unitaries as well as other S&Ls.
The transfer was made with the understanding that sharing liabilities
would be matched by ending special provisions for the S&L industry and
that comparable regulation would ensue.
The bill benefits smaller, community banks and the customers they
serve in the following additional ways:
1. Federal Home Loan Bank System reforms. The FHLB charter is
broadened to allow community banks to borrow for small business and
family farm lending. The implications of this FHL 8 mission expansion
are extraordinary. In rural areas, it allows, for the first time,
community banks to have access to long-term capital comparable to the
Farm Credit System, which like the Federal Home Loan Bank System is
empowered as a Government Sponsored Enterprise to tap national credit
markets at near Treasury rates. The bill thus creates greater
competitive equity between community banks and the Farm Credit System
and greater credit cost savings for farmers. With regard to the small
business provision, the same principle applies. If larger financial
institutions choose to emphasize relationships with larger corporate
and individual

[[Page H11529]]

customers, the ability of community banks to pledge small business
loans as collateral for FHLB System advances will allow them to serve
comprehensively a small business and middle class family market niche.
Most importantly, if the present trend continues of American savers
putting less money in banks and more in non-insured deposit accounts,
such as money-market mutual funds, this FHLB reform assures community
banks the liquidity--at competitive costs--they will need for
generations to come.

2. Additional Powers. In recent years, sophisticated money-center
banks have developed powers, under Federal Reserve and OCC rulings,
that have allowed them to offer products which community banks in many
states are frequently precluded from offering. This bill allows
community banks all the powers as a matter of right that larger
institutions have accumulated on an ad hoc basis. In addition,
community banks for the first time are authorized to underwrite
municipal revenue bonds.
3. Regulatory relief. The legislation provides modest regulatory
relief for banks with assets under $250 million. Those with an
``outstanding'' Community Reinvestment Act rating will be examined for
compliance only every five years, while those with a ``satisfactory''
rating will be reviewed every four years.
4. Special provisions. For a bill of this magnitude, there are
surprisingly few special interest provisions. The Congress held the
line to assure that breaches of imprudent regulation were not provided
to specific institutions, therefore protecting the deposit insurance
fund, to which community banks disproportionately provide resources,
and the public, which is the last contingency backup.
5. Prohibition on deposit production offices. The legislation expands
the prohibition on deposit production offices contained in the Reigle-
Neal Interstate bill to include all branches of an out-of-state bank
holding company. This prohibition ensures that large multi-state bank
holding companies do not take deposits from communities without making
loans within them.
6. Competition. The powers under the Act will provide community banks
a credible basis to compete with financial institutions of any size or
any specialty and, in addition, to offer, in similar ways, services
that new entrants into financial markets, such as Internet or computer
software companies, may originate.
In a competitive world in which consolidation has been the hallmark
of the past decade, the framework of this bill assures that community
banks have the tools to remain competitive. If larger institutional
arrangements ever become consumer-unfriendly or geographically-
concentrated in their product offerings, the powers reserved for
community banks will ensure their competitive viability and, where
needed, incentivize the establishment of new community-based
institutions.
What the new flexibility provided community banks means is that
consumers and small businesses in the most rural parts of America will
be provided access to the most up-to-date, sophisticated financial
products in the world, delivered by people they know and trust. Without
financial modernization legislation, the trend towards commerce and
banking, as well as more faceless interstate banking, will be
unstoppable. Community based institutions need to be able to compete
with larger institutions on equal terms or growth and economic
stability in rural America will be jeopardized.
Several other sections of the legislation also deserve comment:

complementary activities

The Act permits the Federal Reserve Board to allow financial holding
companies to engage in activities that, while not financial in nature
or incidental to financial activities, are complementary to financial
activities. The Act provides that this authority be exercised on a
case-by-case basis under the application procedure currently applicable
under the Bank Holding Company Act to nonbanking proposals by bank
holding companies. This procedure requires the Board to consider
whether the public benefits of allowing the financial holding company
to conduct the proposed complementary activity outweigh potential
adverse effects. This would require the Board to consider whether the
proposal is consistent with the purposes of the Bank Holding Company
Act. It is expected that complementary activities would not be
significant relative to the overall financial activities of the
organization.

foreign banks

For foreign banks that wish to be treated as financial holding
companies, Section 103 requires that the Federal Reserve Board
establish capital and management standards comparable to those required
for U.S. organizations, giving due regard to national treatment and
equality of competitive opportunity. The purpose of the provision is to
ensure that foreign banks continue to be provided national treatment,
receiving neither advantages nor disadvantages as compared with U.S.
organizations. Accordingly, foreign banks that meet comparable
standards are entitled to the full benefits of the Act.
The Act eliminates the application process for financial holding
companies that meet the new criteria relating to capital and
management. This is an important provision; it enhances efficiency and
reduces regulatory burden but it also has certain consequences. One is
that the Federal Reserve Board no longer has an application process
through which to determine adherence by foreign banks to capital and
management standards. Foreign banks operate in different home country
regulatory environments, with differing accounting and reporting
standards. In the past, the Board has used the applications process to
assess the capital levels of individual banks seeking to expand their
operations in the United States to ensure the equivalency of their
capital to that required to U.S. banking organizations. Section 103 is
intended to give the Board the ability to set comparable standards and
establish a process for determining a foreign bank's adherence to those
standards before the bank may take advantage of the Act's provisions.
Such a determination could be accomplished in a pre-clearance
evaluation conducted in connection with the foreign bank's
certification to be treated as a financial holding company and thereby
attain the benefits of the new powers.

merchant banking

One important provision of the Act is that it would authorize
financial holding companies to engage in merchant banking activities
but subject to a number of prudential limitations. For example, the Act
would permit a financial holding company to engage in merchant banking
only if the company has a securities affiliate, or a registered
investment adviser that performs these functions for an affiliate
insurance company. In addition, the Act allows a financial holdings
company to retain a merchant banking investment for a period of time to
enable the sale or disposition on a reasonable basis and generally
prohibits the company from routinely managing or operating a
nonfinancial company held as a merchant banking investment.
Importantly, the Act also gives the Federal Reserve and the Treasury
the authority to jointly develop implementing regulations on merchant
banking activities that they deem appropriate to further the purposes
and prevent evasions of the Act and the Bank Holding Company Act. Under
the authority, the Federal Reserve and Treasury may define relevant
terms and impose such limitations as they deem appropriate to ensure
that this new authority does not foster conflicts of interest or
undermine the safety and soundness of depository institutions or the
Act's general prohibitions on the mixing of banking and commerce.

securities activities of financial holding companies

Currently, bank holding companies are generally prohibited from
acquiring more than five percent of the voting stock or any company
that conducts activities that are not closely related to banking. I
would like to make clear that by permitting financial holding companies
to engage in underwriting, dealing and market making. Congress intends
that the five-percent limitation no longer applies to bona fide
securities underwriting, dealing and market-making activities. In
addition, voting securities held by a securities affiliate of a
financial holding company in any underwriting, dealing or market-making
capacity would not need to be aggregated with any shares that may be
held by other affiliates of the financial holding company. This is
necessary to allow bank-affiliated securities firms to conduct
securities activities in the same manner and to the same extent as
their nonbank affiliated competitors, which is one of the principal
objectives of this legislation. I would also like to make clear that
the elimination of the five-percent restriction is intended to apply to
bona fide securities underwriting, dealing and market-making activities
and not to permit financial holding companies and their affiliates to
control non-financial firms in ways that are otherwise impermissible
under this Act.

Effective Date for Engaging in New Activities

New Section 4(k)(4) of the Bank Holding Company Act, as added by
Section 103 of the bill, explicitly authorizes bank holding companies
that file the necessary certifications to engage in a laundry list of
financial activities. These activities are permissible upon the
effective date of the Act without further action by the regulators.
However, refinements in rulemaking may be necessary and desirable going
forward. For example, the Federal Reserve Board and the Treasury
Department are specifically authorized to jointly issue rules on
merchant banking activities. If the regulators determine that any such
rulemaking is necessary, they should act expeditiously.
In closing, while the financial modernization legislation provides
for increased competition in the delivery of financial products, it
repudiates the Japanese industrial model and forestalls trends toward
mixing commerce and

[[Page H11530]]

banking. The signal breach of banking and commerce that exists in
current law is plugged, which has the effect of both stopping the
potential ``keiretzuing'' of the American economy and protecting the
viability, and therefore the value, of community bank charters. At many
stages in consideration of bank modernization legislation, powerful
interest groups attempted to introduce legislative language which would
have allowed large banks to merge with large industrial concerns--i.e.,
to provide that Chase could merge with General Motors or Bank of
America with Amoco. Instead, this bill precludes this prospect and,
indeed, blocks America's largest retail company from owning a federally
insured institution, for which an application is pending.
To summarize, tonight this Congress will pass a bank modernization
bill true to America's fundamental economic values: excessive
conglomeration is deterred, consumer protections are enhanced, consumer
choices are expanded, privacy protections are created for the first
time under federal law, and the safety and soundness of the nation's
financial system are maintained.
Madam Speaker, I reserve the balance of my time.
Mr. LaFALCE. Madam Speaker, I yield myself 3 minutes.
(Mr. LaFALCE asked and was given permission to revise and extend his
remarks.)
Mr. LaFALCE. Madam Speaker, I rise in strong support of the
conference report on S. 900 and H.R. 10.
Before I begin, let me simply say that I would like to associate
myself with each and every remark of the distinguished chairman of the
Committee on Banking and Financial Services, the gentleman from Iowa
(Mr. Leach). He gave thanks to a great many individuals. I want to
especially join him in giving thanks to those same individuals.
There are a few other individuals, though, that I should mention, and
that is, the fine staff, not only Jeanne Roslanowick but Tricia Haisten
and Dean Sagar and Jaime Lizarraga, Patty Lord, Kirsten Johnson-Obey,
and the fine Senate staff of Senator Sarbanes, most especially Steve
Harris and Marty Gruenberg and Patience Singleton.
Also, I want to single out, this has been a bipartisan effort from
within the Committee on Banking and Financial Services. The gentleman
from Iowa (Mr. Leach) the gentlewoman from New Jersey (Mrs. Roukema),
the gentleman from Minnesota (Mr. Vento), myself, we would not have
gotten here unless, when I was working with the administration and
introducing a bill to the administration, who said they could support
H.R. 665, two Republicans had not joined with me immediately in support
of the administration's effort. That is the chairman of the Committee
on Rules, the gentleman from California (Mr. Dreier) and the chairman
of the Subcommittee on Capital Markets, Securities and Government
Sponsored Enterprises, the gentleman from Louisiana (Mr. Baker). They
helped make this truly a bipartisan product.
Let us not kid ourselves, a lot of spin is being put on what has gone
on. But this is largely the House product that we are witnessing today
in the conference report, because the conference report, like the
initial House bill, strengthens the national bank charter, contains
strong CRA and privacy provisions, and that is why the administration
is able to strongly endorse and support this bill.
Like the House product, the conference report before us ensures that
banks have a choice of corporate governance. For the first time, we
prohibit a depository institution from engaging in nonbank activities
unless it has and maintains on an ongoing basis at least a satisfactory
CRA rating. The Senate bill had no such provision. The Senate bill had
no such provision with respect to corporate choice.
We include the strong privacy provisions that passed this House 427
to 1, except we strengthen those provisions by expanding the disclosure
requirements and ensuring that stronger State privacy laws are
protected. The Senate bill had no privacy provisions. The House bill
that passed the previous Congress, with a number of those individuals
dissenting from today's bill, they voted for the last Congress' bill
with no privacy protections whatsoever.
The conference report before us does not contain a small bank
exemption from CRA at all. The Senate bill did. We got them to cave on
that.
I could go on and on and on, but my time has expired. Later, Madam
Speaker, I would like to engage in a colloquy with the gentleman.
Mr. DINGELL. Madam Speaker, I yield myself 3 minutes.
(Mr. DINGELL asked and was given permission to revise and extend his
remarks.)

General Leave

Mr. DINGELL. Madam Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks on this measure.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
Mr. DINGELL. Madam Speaker, I rise in strong opposition to this bill.
It recognizes technological and regulatory changes that have blurred
the lines between industries and products. However, it fails to
recognize that human nature has not changed.
It also fails to recognize something else. The technology that has
changed has made it much easier to take money from the innocent and
from the unsuspecting. It relaxes protection for investors, taxpayers,
depositors, and consumers.
Let us talk about what is wrong with the legislation. First, it
facilitates affiliations between banks, brokerages, and insurance
companies, and facilitates the creation of institutions too big to
fail.
It does not reform deposit insurance or antitrust implementation and
enforcement. Woe to the American people when they have to pick up the
tag for one of the failures that is going to occur when competition
disappears and prices shoot up and misbehavior or unwise behavior takes
place.
It also authorizes banks' direct operating subsidiaries to engage in
risky new principle activities, like securities underwriting, and in 5
years, merchant banking. The flimsy limitations and firewalls here will
not hold back the contagion and misfortune that follows the foolishness
in not reforming deposit insurance, thus creating enormous risk to
taxpayers and depositors.
Second, the privacy provisions in S. 900 are at best a sham. The
gentleman from Massachusetts (Mr. Markey) and other colleagues will set
forth at length the points that need to be made on this matter. I
associate myself with their remarks.
It should be noted, as a third point, that this bill undermines the
Community Reinvestment Act. Many of my colleagues will speak to this
point more eloquently than I. I wish to associate myself with their
remarks.
Fourth, it undermines the separation of banking and commerce. Title
IV closes the unitary thrift loophole by barring future ownership of
thrifts by commercial concerns, but some 800 firms are grandfathered
and can engage in any commercial activity, even if they are not so
engaged on the grandfather date.
Moreover, Title I allows new financial holding companies, which
incorporate commercial banks, to engage in any complementary activities
to financial activities determined by the Federal Reserve. Any S&L
holding company, whether or not grandfathered, can engage in activities
determined to be complementary for financial holding companies.
S. 900 clearly ignores the warning that Secretary Rubin gave to
Congress in May: ``We have serious concerns about mixing banking and
commercial activities under any circumstances, and these concerns are
heightened as we reflect on the financial crisis that has affected so
many countries around the world for the past 2 years.''
Fifth, the conference agreement would let banks evaluate and process
health and other insurance claims without having to comply with State
consumer protections. This means banks, of all people, will make
important medical benefit decisions that patients and doctors should
make.
According to the National Association of Insurance Commissioners, S.
900 would prevent up to 1,781 State insurance protection laws and
regulations from being applied to banks that conduct insurance
activities.
Sixth, it contains provisions with regard to the redomestication of
mutual insurers that will have a devastating effect upon State
regulation and upon the investors and insurance customers.

[[Page H11531]]

Madam Speaker, I include for the Record the following documents:

National Community

Reinvestment Coalition,

November 1, 1999.
Dear Member of Congress: On behalf of our 700 member
community organizations, the National Community Reinvestment
Coalition (NCRC) urges you to vote against the Gramm-Leach-
Bliley Financial Services Modernization Act of 1999. NCRC
believes the Gramm-Leach-Bliley bill will undermine progress
in neighborhood revitalization by chipping away at major
provisions of CRA (Community Reinvestment Act). It also
misses a vital opportunity to greatly expand access to credit
and capital to America's working class and minority
communities by modernizing CRA as Congress modernizes the
financial services industry.
During the 1990's, a strengthened Community Reinvestment
Act (CRA) has played a major role in increasing access to
loans and investments for working class and minority
communities. Federal Reserve Governor Edward Gramlich
recently estimated that CRA-related home, small business, and
economic development loans total $117 billion annually.
Contrary to what is being said, this bill will have a
negative impact on CRA and the considerable progress of
lending to low- and moderate-income communities made by our
nation. By stretching out small bank CRA exams to five years
for an ``Outstanding'' rating and four years for a
``Satisfactory'' rating, this bill will reduce the
effectiveness of CRA as a tool in rural and small town
America. Small banks (under $250 million in assets) will
become adept at gaming the CRA process. They will relax their
CRA lending in underserved communities for three or four
years, and then hustle to make loans the last year before a
``twice in a decade'' CRA exam. The current practice of CRA
exams occurring once every two years keeps small banks on
their toes since they know that the next exam is just around
the corner.
In addition, NCRC objects to the so-called ``sunshine''
provision of this legislation. While no one can argue with
the concept of sunshine, the provisions in this bill provide
no real sunshine and are aimed instead at chilling the First
Amendment rights of advocates. By requiring special reporting
requirements only of those groups which comment on
applications and the CRA records of banks, this bill provides
a disincentive for community groups to particpate in the CRA
process. Additionally this bill prevents banking agencies
from monitoring the level of loans and investments made under
CRA agreements during CRA exams and merger applications.
These provisions are bad public policy designed solely to
restrict the ability of communities to demand accountability
and continue reinvestment from their financial institutions.
NCRC understands the symbolic importance of the ``have and
maintain'' CRA rating clause in this bill. We believe that
the requirement that financial holding companies have at
least a ``Satisfactory'' CRA rating in order to merge or
engage in new non-banking financial activities is useful
because it will give the industry even more incentive to
avoid failing CRA ratings. On a practical level, however,
this so-called ``extension of CRA'' is largely illusory. By
not requiring applications and public comment periods when
financial holding companies merge or engage in the new
insurance, securities, and other non-banking activities, this
bill eliminates the most effective tool communities have to
insure the accountability of financial holding companies to
their community.
We also hasten to point out that the ``have and maintain''
provision is unlikely to have any practical effect. Due to
the bank regulators' rampant grade inflation, none of the
largest holding companies that would most likely be affected
by this clause have any depository institutions with a less
than Satisfactory CRA rating. Satisfactory CRA ratings have
become so automatic that recently the OCC granted a
``Satisfactory'' rating to a Mississippi institution and the
Federal reserve approved a major merger of that institution
at the same time that the Department of Justice was in the
process of finding that the bank was in violation of the
nation's fair lending laws.
Meanwhile, the most important issues confronting the
continued progress of reinvestment are not addressed by this
legislation. Because of the current link of CRA to depository
institutions, some holding companies whose depository
institutions are covered by CRA are simultaneously engaging
in predatory, subprime lending through affiliates not covered
by CRA. Other non-depository affiliates that will be making
considerable number of loans will simply overlook low- and
moderate-income communities. The financial modernization bill
misses an important opportunity to extend CRA and fair
lending laws to non-depository affiliates of holding
companies that make significant amounts of loans.
The explosion of internet banking is muddling the
significance of what are called ``service areas'' in the
Community Reinvestment Act. A large institution which takes
deposits and makes loans throughout the nation can
nonetheless restrict its ``service area'' to one small locale
if it operates without the traditional bricks and mortar
branch structure. These and other fundamental issues relating
to the updating and modernizing of CRA should have been dealt
with in a financial modernization bill and were not.
Finally, we want to be sure that you are clearly aware that
the vast majority of community groups do not support this
bill despite claims to the contrary. While we know of one
high profile group that has endorsed this bill, we are
unaware of any others. Almost all of our members, who
represent the heart of the community reinvestment industry in
this country, have been expressing their profound
disappointment in this legislation.
Millions of low- and moderate-income and minority
individuals and families have become homeowners and small
business owners because of a strong Community Reinvestment
Act. We urge you to vote against this bill because of its
failure to adequately update and protect CRA. Attached please
find a list of NCRC's 700 community organization and local
public agency members organized by state.
Sincerely,
John Taylor,
President and CEO.
____

National Community

Reinvestment Coalition,

October 29, 1999.
Hon. William Jefferson Clinton,
President of the United States of America,
The White House, Washington, DC.
Dear Mr. President: On behalf of our 700 member community
organizations, the National Community Reinvestment Coalition
(NCRC) respectfully urges you to veto the Gramm-Leach-Bliley
Financial Services Modernization Act of 1999 when it comes
before you. We appreciate this Administration's strong
commitment to the Community Reinvestment Act. The development
of the new CRA regulations early in your Administration and
the Department of Justice's focus on fair lending issues has
made a significant difference in the ability of residents of
low- and moderate-income communities to gain access to
credit. We also appreciate your Administration's commitment
to fighting off the most anti-CRA aspects of the Senate
version of financial modernization.
We believe the Gramm-Leach-Bliley bill as proposed will
undermine progress in reinvestment and misses a vital
opportunity to greatly expand access to credit and capital to
America's traditionally undeserved communities. NCRC thought
that the financial modernization bill offered an ideal
opportunity for this Administration to put its stamp on the
evolution of the financial services industry by updating and
modernizing CRA so that it would continue to be relevant to
the evolving financial services industry in the 21st century.
Unfortunately, the bill that is about to be passed fails to
do that in any significant way, while at the same time
chipping away major provisions of the current law.
NCRC understands the symbolic importance of the ``have and
maintain'' CRA rating clause in this bill. We believe that
the requirement that financial holding companies have at
least a ``Satisfactory'' CRA rating in order to merge or
engage in new activities is useful because it will give the
industry even more incentive to avoid failing CRA ratings. On
a practical level, however, this so-called ``extension of
CRA'' is largely illusory. By not requiring applications and
public comment periods when financial holding companies merge
or engage in these new activities, this bill eliminates the
most effective tool communities have to insure the
accountability of financial institutions to their community.
We also hasten to point out that the ``have and maintain''
provision is unlikely to have any practical effect. Due to
the bank regulators' rampant grade inflation, none of the
largest holding companies that would most likely be affected
by this clause have any depository institutions with a less
than Satisfactory CRA rating. Satisfactory CRA ratings have
become so automatic that recently the OCC granted a
``Satisfactory'' rating to a Mississippi institution and the
Federal Reserve approved a major merger of that institution
at the same time that the Department of Justice was in the
process of finding that the bank was in violation of the
nation's fair lending laws.
Also we would note that contrary to what is being said,
this bill does have a negative impact on current CRA law. By
stretching out small bank CRA ratings to five years for an
``Outstanding'' rating and four years for a ``Satisfactory''
rating this bill will reduce the effectiveness of CRA as a
tool in rural America. Earlier in your Administration, these
institutions were already given a greatly simplified CRA
evaluation system that addressed the regulatory relief
concerns of small banks. The extension of the examination
cycle only serves to make CRA more difficult to enforce for
small banks
We also object to the so-called ``sunshine'' provisions of
this law. While no one can argue with the concept of
sunshine, the provisions in this bill provide no real
sunshine and are aimed instead at chilling the First
Amendment rights of advocates. By requiring special reporting
requirements only of those groups which comment on
applications and the CRA records of banks, this bill provides
a disincentive for community groups to participate in the CRA
process. Additionally this bill prevents banking agencies
from monitoring the level of loans and investments made under
CRA agreements during CRA exams and merger applications.
These provisions are bad public policy designed solely to
restrict the ability of communities to demand accountability
from their financial institutions.
Meanwhile the most important issues facing the reinvestment
community remain un-

[[Page H11532]]

addressed by this legislation. Because of the current link of
CRA to depository institutions, some holding companies whose
depository institutions are covered by CRA are simultaneously
engaging in predatory, subprime lending through affiliates
not covered by CRA. Other non-depository affiliates that will
be making considerable number of loans will simply overlook
low- and moderate-income communities. The financial
modernization bill missed an important opportunity to extend
CRA and fair lending laws to non-depository affiliates of
holding companies that make significant amounts of loans.
The explosion of internet banking is muddling the
significance of what are called ``services areas'' in the
Community Reinvestment Act. A large institution which takes
deposits and makes loans throughout the nation can
nonetheless restrict its ``service area'' to one small locale
if it operates without the traditional bricks and mortar
branch structure. These and other fundamental issues relating
to the updating and modernization of CRA should have been
dealt with in a financial modernization bill and were not.
Finally we want to be sure that you are clearly aware that
the vast majority of community groups do not support this
bill for the reasons we have outlined above. We have heard
some members of this Administration making the claim that
``community groups support this bill.'' While we know of two
high profile groups that have endorsed this bill, we are
unaware of any others. Almost all of our members, who
represent the heart of the community reinvestment industry in
this country, have been expressing their disappointment in
this bill.
Millions of low- and moderate-income and minority
individuals and families have become homeowners because of
the strong economy and because of your Administration's
commitment to improving the access to credit and capital for
Americans of modest means. We urge you to continue to
strengthen that commitment by vetoing this bill because of
its failure to adequately strengthen and protect CRA. As
always we stand ready to work with you to continue to improve
the Community Reinvestment Act.
Sincerely,
John Taylor,
President and CEO.
____

National Conference of State Legislatures, National
Conference of Insurance Legislators,
October 28, 1999.
Dear Representatives: We write today to express our
opposition to the Conference Committee Report on the Gramm-
Leach-Bliley Financial Modernization Act. We are dismayed at
the inclusion in the legislation of Subtitle B, the
Redomestication of Mutual Insurers. We submit that Subtitle B
is not in the public interest, rather it is anti-consumer.
This provision would circumvent well-designed and thought-out
state policy regarding the redomestication of mutual
insurance companies. Subtitle B has little to do with
financial services modernization. Rather it serves to
undermine state law, which seeks to protect our constituents
for the benefit of a few. Gramm-Leach-Bliley could place as
many as 35 million policyholders, many of your constituents,
at risk of losing $94.7 billion in equity. Should this occur,
it would amount to a Congressionally approved takings of
consumers' personal property.
Subtitle B would allow mutual insurers domiciled in states
whose legislatures have elected not to allow mutual insurers
to form mutual holding companies to escape that legislative
determination. It would allow mutual insurers to move simply
because a state, through its duly elected legislative branch
of government, has determined that formation of mutual
holding companies is not in the best interest of the state or
its mutual insurance policyholders who are, after all, the
owners of the company. Gramm-Leach-Bliley will preempt the
anti-demutualization laws in 30 states: Alabama, Alaska,
Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia,
Hawaii, Idaho, Illinois, Maine, Maryland, Michigan, Montana,
Nevada, New Hampshire, New Jersey, New Mexico, New York,
North Carolina, Oklahoma, South Dakota, Tennessee, Utah,
Virginia, Washington, West Virginia, and Wyoming.
We support the overall intent of S. 900/H.R. 10, which is
to modernize financial services regulation and to make the
U.S. financial services industry competitive with its
overseas counterparts. However, not one supporter of
redomestication has come forward to prove that the Subtitle B
is indeed vital to financial services modernization or even
to defend its inclusion in the legislation. There were no
hearings on this Subtitle by any of the House or Senate
Committees. Subtitle B was added to H.R. 19 by attaching it
to an amendment on domestic violence because such an onerous
provision could not stand-alone.
The National Conference of State Legislatures is the
bipartisan national organization representing every state
legislator and the National Conference of Insurance
Legislators is the national conference of state legislators
who are involved in the regulation of the business of
insurance within their respective states. Both of our
organizations have unanimously adopted resolutions opposing
Subtitle B and supporting its deletion from any financial
services modernization legislation.
On behalf of our colleagues across the country and
especially our millions of constituents who will wonder why
Congress gave away their hard-earned equity, we respectfully
ask you vote NO on Gramm-Leach-Bliley.
We thank you for your consideration.
Very truly yours,
David Counts,
Texas, NCOIL President.
Joanne Emmons,
Michigan, Chair, NCSL Commerce & Communications Committee.

To see how policyholders in your State would fare if the
Gramm-Leach-Bliley Financial Modernization Act is approved
with subtitle B of title III, Redomestication of Mutual
Insurers, included look below:
According to the Center for Insurance Research, if all the
major mutual life insurers took advantage of the provisions
in Subtitle B of Gramm-Leach the equity loss to consumers in
each state:

------------------------------------------------------------------------
Number of
State policies in Policyholder equity/
State equity per policy
------------------------------------------------------------------------
Alabama.......................... 247,666 $449,895,848/$1,817
Alaska........................... 48,208 $98,061,387/$2,034
Arizona.......................... 48,208 $98,061,387/$2,034
Arkansas......................... 116,906 $207,701,616/$1,777
California....................... 2,713,352 $4,960,251,308/$1,828
Colorado......................... 758,110 $1,307,009,088/$1,724
Connecticut...................... 739,154 $1,176,333,479/$1,591
Delaware......................... 326,315 $549,292,374/$1,683
District of Columbia............. 239,447 $408,029,322/$1,704
Florida.......................... 1,164,719 $2,121,274,692/$1,821
Georgia.......................... 636,580 $1,179,107,023/$1,852
Hawaii........................... 96,275 $169,195,580/$1,757
Idaho............................ 100,587 $193,715,897/$1,926
Illinois......................... 2,397,312 $3,960,690,446/$1,652
Indiana.......................... 541,558 $962,599,522/$1,777
Iowa............................. 431,090 $1,338,632,792/$3,105
Kansas........................... 269,657 $470,714,158/$1,746
Kentucky......................... 277,135 $480,640,500/$1,734
Louisiana........................ 316,315 $591,448,499/$1,870
Maine............................ 111,933 $192,199,433/$1,717
Maryland......................... 636,883 $1,082,119,697/$1,699
Massachusetts.................... 1,981,266 $3,261,185,133/$1,646
Michigan......................... 1,110,156 $1,860,412,511/$1,676
Minnesota........................ 588,441 $1,111,376,308/$1,889
Mississippi...................... 139,868 $254,615,010/$1,820
Missouri......................... 577,461 $1,095,410,874/$1,897
Montana.......................... 56,782 $115,774,249/$2,039
Nebraska......................... 264,216 $699,369,591/$2,647
Nevada........................... 111,221 $214,805,432/$1,931
New Hampshire.................... 278,240 $489,566,776/$1,760
New Jersey....................... 1,699,347 $2,728,633,207/$1,606
New Mexico....................... 95,171 $174,583,939/$1,834
New York......................... 5,880,112 $9,266,505,199/$1,576
North Carolina................... 794,164 $1,444,262,155/$1,819
North Dakota..................... 59,880 $101,470,302/$1,695
Ohio............................. 1,211,900 $2,003,778,838/$1,653
Oklahoma......................... 207,112 $388,637,200/$1,876
Oregon........................... 221,649 $469,571,008/$2,119
Pennsylvania..................... 1,718,176 $2,833,890,186/$1,649
Rhode Island..................... 155,127 $247,360,868/$1,595
South Carolina................... 299,696 $512,172,351/$1,709
South Dakota..................... 76,699 $140,116,016/$1,827
Tennessee........................ 435,647 $780,407,441/$1,791
Texas............................ 1,364,196 $2,349,322,551/$1,722
Utah............................. 127,730 $244,256,886/$1,912
Vermont.......................... 90,174 $139,448,870/$1,546
Virginia......................... 621,314 $1,229,173,697/$1,978
Washington....................... 371,381 $755,995,423/$2,036
West Virginia.................... 136,532 $243,900,505/$1,786
Wisconsin........................ 635,856 $1,194,889,155/$1,879
Wyoming.......................... 30,643 $63,201,358/$2,062
------------------------------------------------------------------------
Note: This list is only for Life Mutuals, additional equity at risk for
Health Mutuals and Property/Casualty Mutuals. Center for Insurance
Research--617 367-1040.

The list above includes some states that may have passed
demutualization legislation. However, the laws of the state
of domicile of the mutual insurer apply to policyholders even
in those states that have decided to permit demutualization.

{time} 2145

Mr. BLILEY. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, since 1994 when the Republicans took control of
Congress, we have passed telecommunications reform, securities
litigation reform, Medicare reform, the Safe Drinking Water Act
amendments of 1996, the Food Quality Protection Act of 1996, the Health
Insurance Portability and Accountability Act, welfare reform, the
Balanced Budget Act of 1997, Food and Drug Administration Modernization
Act of 1997, and numerous other reform and modernization bills on
behalf of the American people. These are just a few of the
unprecedented number of pro-consumer, bipartisan laws that my committee
worked on.
We now stand poised to add another significant reform to the top of
the list.
Today we are about to achieve something that no Congress before us in
the last 65 years has been able to accomplish, agreeing to
comprehensive financial services modernization. For 65 years, beginning
with the efforts of a gentleman from Virginia, Representative Carter
Glass, Congress has struggled to reform and modernize the regulation of
our financial services industry. Mr. Glass was unsuccessful, but his
legacy continues.
Last term, we were told by every industry lobbyist and Washington
trade associations that this bill was dead; that it could not be done;
that Congress had neither the will nor the vision to overcome the
special interests opposed to this legislation.

[[Page H11533]]

Whether out of ignorance or hardheadedness we continued to push
forward, suffering the opposition at various points of almost every
industry faction and interest, but we prevailed.
Two years ago our committee breathed life into this legislation by
putting consumers first. Until then every special interest group had
agreed in concept to a level playing field, but just with a slight tilt
toward their industry.
The bill was full of regulatory arbitrage, allowing companies to
shift money and activities to the place of least regulation and fewest
consumer protections.
Our committee said no to these special interest lobbyists. We laid
down the law that activities should be regulated with the same strong
consumer protections and safeguards no matter where the activity takes
place.
This is called functional regulation, and functional regulation means
that everyone gets the same oversight, the same rules, with no special
advantage towards any party. The lobbyists do not like it but it is
common sense, and it is right. We then looked at the barriers and red
tape that prevented companies from offering and competing in a wide
variety of products for consumers. American jobs were being lost and
consumers were paying too much for their financial services, because
government was still imposing 65-year-old burdens and bureaucracy,
created long before computers became commonplace and anyone even
dreamed of the Information Age.
This bill removes those antiquated barriers and eliminates the
bureaucratic red tape. It gets government off the back of business and
enables them to compete for consumers worldwide in the markets of the
21st century. This is critical to keep our economy and American job
opportunities the best in the world.
We then stood shoulder to shoulder together with our Democratic
colleagues to demand that this bill must establish strong consumer
protection for companies wishing to engage in new competitive
opportunities. We established strict antidiscrimination provisions,
requirements for banks to reinvest in their local communities,
protections for victims of domestic violence and full protection of
antitrust laws to ensure the safety and soundness of our monetary
system.
These are critical protections for consumers that have waited far too
long for congressional action.
Let us stop for a moment and think about the reforms that this Gramm-
Leach-Bliley Act would achieve. We are creating the first-ever general
financial privacy laws to protect the privacy of consumers'
information. Current law provides almost no protection for the
individual consumer to know how their private information is being
shared or how to stop confidential information from being sold. This
bill gives consumers privacy protections. It gives them the right to
stop information from being sold to unaffiliated third parties and the
knowledge to make a choice about where they want to do business.
These protections are all improvements over current law and represent
a huge first step towards improving the privacy rights of consumers. To
let this opportunity slip through our fingers would be doing a grave
disservice to the American people.
This bill also sets forth a framework for new consumer protections
for insurance, securities and banking functional regulation. For too
long we have allowed unelected bureaucrats to fight over regulatory
turf, losing sight of the consumer in the process. We have put an end
to these turf battles and put the consumer back at the forefront of our
agency's agenda. We also provide for flexible but comprehensive
oversight of the financial services industry by a coordinated body of
independent and administrative agencies.

We watched the global meltdown of the international financial markets
and we heard the worries of the American people about strengthening our
local markets against outside attacks. We cannot afford to have one
single American left behind or put at risk because Congress did not
have the courage to bring our financial services industry together
under a modern regulatory system.
This bill does that, and I believe that this Congress does have the
courage to make these reforms. We found the solutions to bring people
together and we now stand ready to reinvigorate our financial services
industry to give the American people the best financial services and
protections in the world.
I want to commend my fellow chairmen, Chairman Gramm and the
gentleman from Iowa (Mr. Leach); thanks to my good friend, the
gentleman from Ohio (Mr. Boehner), whose good work last Congress put us
on the green within putting distance, and most especially I want to
thank and commend the gentleman from Ohio (Mr. Oxley), the subcommittee
chairman.
The gentleman from Ohio (Mr. Oxley), who never gave up, who kept his
shoulder to the wheel throughout this entire process, he never let us
succumb to the petty vagaries of politics. We would not have a bill
without the gentleman from Ohio (Mr. Oxley). So I again commend and
thank him.
I want to thank all the staff that was involved in this effort. I
especially thank my own staff, all five and a half of them, David
Cavicke, Brian McCullough, Robert Gordon, Robert Simison and, of
course, Linda Rich, with the help of little Peter MacGregor Rich.
I think the Members of this conference should be proud. We have shown
the will to overcome every obstacle thrown in our way and to stand on
the brink of accomplishing something great for our country.
Sixty-five years after Carter Glass from Virginia started the
financial service modernization effort, we are finally fulfilling his
vision for the American people. I urge support of the Gramm-Leach-
Bliley Act and look forward to adding this legislation to the many
achievements of this Congress.
Madam Speaker, I reserve the balance of my time.
Mr. LEACH. Madam Speaker, I yield 30 seconds to the gentleman from
Florida (Mr. McCollum).
(Mr. McCOLLUM asked and was given permission to revise and extend his
remarks.)
Mr. McCOLLUM. Madam Speaker, I rise in support of this most
significant legislation. It will modernize and strengthen our banking
system and assure the viability and availability of retail banking into
the next century. It will provide consumer privacy in banking for the
first time ever. It will make it easier for consumers to handle their
banking and insurance and security matters and it will lower the cost
to consumers for banking, insurance and securities products and
services.
It is truly the most significant banking legislation of all the years
I have served on the Committee on Banking and Financial Services. I
strongly support it. I urge its adoption. I am proud to have worked
with the gentleman from Iowa (Mr. Leach) and the others to craft it and
I hope it is adopted tonight.
Mr. LaFALCE. Madam Speaker, I yield myself such time as I may consume
to engage in a colloquy with the chairman of the Committee on Banking
and Financial Services, the gentleman from Iowa (Mr. Leach).
Am I correct in stating that it is the intent of the conferees that
the disclosure and reporting requirements contained in section 11 be
interpreted narrowly so as to reduce the burden on parties regarding
these disclosure and reporting requirements?
Mr. LEACH. Madam Speaker, will the gentleman yield?
Mr. LaFALCE. I yield to the gentleman from Iowa.
Mr. LEACH. Yes. There are two subsections that should be read
together. One that calls for a listing of expenses and the other that
stipulates regulations promulgated under this provision not establish
undue regulatory burdens. While tensions exist between these two
sections, the clear intent is for regulatory discretion in implementing
the reporting requirements.
For instance, meal expenses and taxicab receipts are not contemplated
as having to be reported under this new section. In addition, it is
clear, as indicated in the conference report, that in the vast majority
of cases groups may comply with the disclosure and reporting
requirements through the filing of audited statements or tax returns.
Mr. LaFALCE. Well, that is very important. It is my understanding
that the reporting requirement related to what information is to be
included is intended to allow compliance by the filing of an annual
financial statement

[[Page H11534]]

or Federal income tax return. It is not the intent that this provision
require a reporting of any particular expense but rather a listing of
the categories of expenses, if any, required to be reported. Is that
also the understanding of the gentleman?
Mr. LEACH. Yes, it is my understanding, and I understand as well that
the gentleman may be inserting for the Record a further elaboration of
this issue which reflects our mutual understanding of how this section
is to be treated.
Mr. DINGELL. Madam Speaker, I yield 2 minutes to the distinguished
gentlewoman from California (Ms. Waters), a member of the Committee on
Banking and Financial Services.
Ms. WATERS. Madam Speaker, serving on the Committee on Banking and
Financial Services I understand and I understood for a long time that
one day we would have a bill that would allow these entities to come
together, banking and commercial interests, and merge. I knew that
would happen, but I always knew that we could protect the consumers if
we wanted to do that. What I am surprised about is the mean-spirited
way in which we have undermined the Community Reinvestment Act.
There was no need to have CRA on the table except for one person, who
does not like CRA, came into the conference committee, determined that
he was going to weaken it and he did. These reporting requirements are
unnecessary. They are simply there to intimidate. What other situation
do we have where two private entities, with an agreement, have to
report on it? No place, no place else but with CRA. I do not care what
they say the intent is. CRA has been weakened.
The rural communities and the inner cities will feel the impact of it
because the activists will go away. They will not be able to comply
with these requirements. But that is not what is going to undo what we
do here tonight. The poor people do not have the power. The activists
could not stand up against the big banks. I knew that CitiCorps and
Travelers would not undo their relationship. They would have had to
undo it in two years if we did not have this law tonight because they
acted on their own to come together and merge, but I knew they would
win. Too big to fail.
What is going to undo what we do here tonight is the invasion of
privacy of American citizens. What has been done is the opportunity has
opened up for one conglomerate to know everything there is to be known
about an individual and their family, everything from their medical,
financial records, everything. We will pay a price for this. We have
paid a price for mistakes in the past as we dealt with the S&Ls. This
will be another one that we will regret.
Mr. BLILEY. Madam Speaker, I yield as much time as he may consume to
the gentleman from Ohio (Mr. Oxley), the chairman of the Subcommittee
on Commerce, Justice, State and Judiciary.
The SPEAKER pro tempore (Mrs. Emerson). The gentleman from Ohio (Mr.
Oxley) has up to 3 minutes.
(Mr. OXLEY asked and was given permission to revise and extend his
remarks.)
Mr. OXLEY. Madam Speaker, I rise in support of this historic
legislation. We are replacing Glass-Steagall finally, after 65 years,
with Gramm-Leach-Bliley, and everybody participated in this effort.
There is a great deal of credit for a job well done. We have had the
heart and the courage. A lot of people have doubted us because it took
us a long time but we are here tonight to pass this bill.
It sets a standard, a strong standard, for consumer safeguards and
establishes a strong regulatory foundation for financial services.
Let me mention a few highlights. This year in our committee I
introduced the first ever comprehensive financial privacy protections
for consumers. It was adopted by the full House and stronger provisions
with the work of the gentlewoman from New Jersey (Mrs. Roukema) and
others in the House-Senate conference committee. Under current law,
consumers have no ability whatsoever to find out how their personal
financial information is being shared. This bill, for the first time,
gives them that ability.
If we want strong consumer protections, particularly a right to
privacy, vote for this legislation because to keep the status quo is to
have no privacy protection whatsoever. It protects account numbers and
access codes. It protects strong State privacy laws from being
overridden, and that is very, very important.
I find it interesting that some Members, while recognizing that
everything in this bill is an improvement over current law, still argue
that we should not enact any protections, nothing at all, if we cannot
load up the bill with every bell and whistle that they want. This is
partly why this bill has been sabotaged in every effort in the last 65
years until this Congress demonstrated the leadership to move it
forward.
The Gramm-Leach-Bliley Act affords real protections and safeguards
for Americans that become law, not just empty words and political
posturing. The privacy protections are only some of the many pro-
consumer entitlements in the bill. Under current law, individual
consumers have no statutory protections governing bank sales of
insurance. This bill provides that protection.

{time} 2200

Domestic violence. Protection against domestic violence
discrimination. State insurance regulators now have equal standing to
protect consumers when regulating. In fact, this bill establishes the
consumers' right to functional regulation of all financial activities,
which is the bedrock of this legislation, this functional regulation. I
am proud that this bill does that.
This bill makes our system work, and it makes our financial system
strong and safe and the envy of world.
I want to congratulate all of those who were involved in this effort,
particularly the gentleman from Iowa (Chairman Leach), the gentleman
from Virginia (Chairman Bliley) for their strong efforts in this
regard.
Madam Speaker, I would be remiss at this time in not mentioning the
hard work and dedication of a young man named Greg Koczanski, who was
senior vice president of Citigroup, and many of my colleagues knew him,
as we discuss this legislation that was so important to Greg.
As many of my colleagues know, Greg died in a tragic hiking accident
earlier this year in Colorado. He was a devoted family man, an avid
sportsman, and true professional in every sense.
I salute Greg for the time and energy he committed to the process of
moving this bill forward. S. 900 bears the imprint of his hard work.
Madam Speaker, the gentleman from Massachusetts (Mr. Markey), a good
friend of mine, always likened this bill to Sisyphus rolling that
boulder up the hill, and he was doomed, doomed to have that boulder
roll back on him and time and time again, doomed for eternity. I say to
the gentleman from Massachusetts, no longer, no longer do I have to
hear that speech in the Committee on Commerce or on the floor. For that
reason and that reason alone, it is important that we pass this bill
tonight.
Mr. LEACH. Madam Speaker, I yield 1 minute to the gentlewoman from
New Jersey (Mrs. Roukema), the distinguished chairman of the
Subcommittee on Financial Institutions and Consumer Credit.
Mrs. ROUKEMA. Madam Speaker, I want to clarify the questions
regarding the privacy title.
Section 503 requires financial institutions to provide customers with
a copy of the financial institution's privacy policies and practices.
These documents must be provided to customers at the time the customer
establishes a relationship with the financial institution and not less
than annually during the continuation of that relationship.
What about single-event transactions, as they are known, with a
financial institution? What does section 503 require of financial
institutions if the relationship with the customer is single-event
transactions, like the purchase of teller's checks, money orders, or
remote bill payments at businesses that do not have an ongoing
relationship?
Madam Speaker, what would we do if these bill payments are done at
businesses that do not have an ongoing relationship?
Mr. OXLEY. Madam Speaker, will the gentlewoman yield?

[[Page H11535]]

Mrs. ROUKEMA. Yes, I will be pleased to yield to the gentleman from
Ohio.
Mr. OXLEY. Madam Speaker, as we discussed, in single-event
transactions such as the ones the gentlewoman from New Jersey
mentioned, financial institutions must disclose to the customer their
privacy policies and practices at the time the transaction is entered
into. A customer relationship is created, but it is over in an
extremely short amount of time. In these types of transactions, no
continuing relationship between the financial institution and the
customer is created. For this reason, the financial institution is not
required to provide its privacy policies to such customers annually.
That was clearly our intent.
Mrs. ROUKEMA. Madam Speaker, I appreciate that.
Mr. LEACH. Madam Speaker, if the gentlewoman will yield, I agree with
the interpretation just expressed.
Mrs. ROUKEMA. Madam Speaker, I think this is very important for us to
have on the Record the interpretation of this legislation.
Mr. LaFALCE. Madam Speaker, I yield 1 minute to the gentleman from
Texas (Mr. Bentsen).
(Mr. BENTSEN asked and was given permission to revise and extend his
remarks.)
Mr. BENTSEN. Madam Speaker, let me first say I support this
legislation, and I want to commend the chairman and the ranking member
of the Committee on Banking and Financial Services for the work they
have done and the staff for the work they have done.
Besides the financial and monetary policy reasons for doing this
bill, I think there are some important facts we have to understand. I
concur with the gentlewoman from California (Ms. Waters) that CRA
should not have been part of this legislation, but we have to
understand the facts of it. It was part of the legislation. Because of
this legislation, we have the stronger CRA language for businesses that
want to get into other financial businesses. That is not in the current
law.
We also have a stronger law as it relates to smaller institutions
because, even though they get a longer interval before they have a CRA
review, the bill is written in such a way that allows the regulator to
go in if there is a material change. So I think CRA actually came out
better.
The sunshine may be somewhat of a nuisance, but it was very narrowly
tailored in the final stages of this bill.
With respect to privacy, the point has been made, and it cannot be
denied, that the provisions in this bill would not exist without this
bill. Consumers are better off by enacting these provisions. We will
have to revisit privacy. Everyone knows it. But if we fail to pass this
bill, consumers will be worse off as it relates to privacy.
Mr. DINGELL. Madam Speaker, I yield 2 minutes to the distinguished
gentleman from Massachusetts (Mr. Markey), a member of the Committee on
Commerce.
Mr. MARKEY. Madam Speaker, we are told how difficult it is, how
complex it is to deal with all of these privacy issues. But when
Citigroup is doing business in Germany, and the German laws say that
every German citizen has the right to protect all their information,
has the right to say, no, they do not want it shared, Citigroup gives
every German citizen a contract protecting their information.
Now, they do not want to give that same contract to American citizens
in their own country. Citigroup says no, we cannot do it in America. It
is too complex.
Now, the American laws have figured out how to ensure one's tax
returns do not get shared, how one's driver's license information does
not get shared, one's video cassette rentals, one's cable TV viewing
habits, one's telephone call records, the location of where one is when
one is using one's cell phone.
Yes, we can pass laws for that. But the financial services industry
says, it would really ruin our synergies if you made it necessary for
us to protect your private information, your checks.
If one wrote a check for one's child's psychiatrist, for one's
prostate cancer, for one's wife's breast cancer, no, one cannot protect
that information. It is our product to sell to market.
There is only one thing that really exists here, Madam Speaker. One
gets one notice, and one gets one notice only from these banks. Here is
what one is going to get: Notice, you have no privacy.
They are going to be legally required to tell one one has no privacy.
Commerce without a conscience. Profit before privacy. Can we not have a
balance in this country?
William Shakespeare, 5 centuries ago: ``Who steals my purse steals
trash; 'tis something, nothing.''
``'Twas mine, 'tis his, and has been slave to thousands.''
But ``he that filches from me my good name robs me of that which not
enriches him, and makes me poor indeed.''
Here, Madam Speaker, one's good name enriches the financial services
industry and will make each family poor, indeed, as it is robbed,
stolen, filched, and capitalized upon by the financial services
industry in this country. Vote no on this bad bill.
Mr. LEACH. Madam Speaker, I yield 45 seconds to the distinguished
gentlewoman from New York (Mrs. Kelly).
(Mrs. KELLY asked and was given permission to revise and extend her
remarks.)
Mrs. KELLY. Madam Speaker, I thank the distinguished gentleman from
Iowa for yielding me the time.
Madam Speaker, I rise today in strong support for the passage of the
Gramm-Leach-Bliley Financial Services Act of 1999. This conference
report truly bridges the disagreements that have torn apart past
efforts to update our financial services laws and brings our laws into
the 21st century.
The true winner in this effort is the consumer. They win on two
fronts: first with savings, and second through the greatest expansion
of financial privacy.
Two provisions are especially noteworthy and will save consumers
money. The NARAB provision will solve a difficult and costly multistate
insurance licensing issue by creating a single higher national
standard.
Another provision will allow banking firms to sell mutual funds to
their customers without having to go through third-party distributors
that do not provide any added value to the bank or customers.
This legislation is a true win-win for the American people, and I
urge my colleagues on both sides of the aisle to join me in favor of
the passage of this historic legislation.
This legislation has been decades in the making and I am pleased to
have been part of the effort to make this legislation a reality. Of
course, this would not have been possible without the excellent work of
my chairman and his top notch staff who set the best example we can all
strive for.
As for privacy, this legislation represents the greatest expansion of
personal financial privacy in the history of American finance.
Consumers will benefit from the mandatory disclosure by financial
institutions of privacy policies and the consumer opt-out choices to
prevent the sale of confidential information to unaffiliated third
parties. This represents only two of the many positive privacy
provisions.
I want to go into greater detail on the provisions of this
legislation that will create NARAB--the National Association of
Registered Agents and Brokers. This subtitle, which I authored, will
streamline the insurance agent and broker licensing process.
Allow me to read something that demonstrates both the desire of state
regulators to achieve the goal of establishing uniform or reciprocal
licensing standards goal and the great impediments to its attainment:

The Commissioners are now fully prepared to go before their
various legislative committees with recommendations for a
system of insurance law which shall be the same in all
States--not reciprocal, but identical; not retaliatory, but
uniform.

This statement expressing the desire for a more uniform insurance
regulatory system was made by George W. Miller, the New York Insurance
Commissioner who founded the National Association of Insurance
Commissioner, at the close of the very first meeting of the NAIC in
1871. The NAIC has been working for almost 130 years to achieve some
level of regulatory uniformity; NARAB will simply assist them in
achieving what has proved to be a very elusive objective.
As advocated by the state insurance commissioners, state insurance
regulation is preserved in this legislation. What NARAB does, though,
is address one of the shortcomings of state regulation. Licensing laws
are not only unnecessarily redundant; they all too often are
protecionist--designed to protect in-state agents and brokers from out-
of-state competition. The NARAB designed to protect in-state agents and
brokers from out-of-state competition. The NARAB subtitle creates the
incentive

[[Page H11536]]

for states to change those out-of-date laws and regulations.
Now that this legislation stands at the brink of enactment, state
insurance regulators must recognize that NARAB is the tool they need to
make licensing less of a burden, and less of an add-on cost to
consumers. Throughout the three-year debate on this provision, some
state insurance commissioners argued that they're getting the job done
on their own, and NARAB is unnecessary. Unfortunately, they've been
saying that for 130 years. With NARAB's enactment into federal law,
there is no choice but for state licensing laws to move into alignment
with the broader modernization goals of this legislation.
Madam Speaker, it is an embarrassment that the separate nations of
Europe have done more to harmonize their insurance licensing laws,
compared to the separate states of America. NARAB will help change
that.
The Gramm-Leach-Bliley Act is good for business and consumers in many
ways. It's important to note, though, that many of the provisions of
this legislation only bring the regulatory scheme into line with what's
already happening in the marketplace. NARAB stands out as one of the
key elements of this legislation that represent true modernization. I
was pleased to author this element of the bill, and am grateful for the
wide support it has enjoyed throughout this process.
Most of all, speaking as a moderate, I feel honored to have played a
role in the enactment of important legislation that has had true
bipartisan leadership. As it should be, this is a legislative product
that should make us all proud.
Mr. LaFALCE. Madam Speaker, I yield 2 minutes to the gentleman from
North Carolina (Mr. Watt).
Mr. WATT of North Carolina. Madam Speaker, I thank the gentleman from
New York for yielding me the time.
Madam Speaker, for the last 4 years, there are probably few people in
this body who have spent more time on this issue and on this bill than
I have. I have read every bill and every draft from front to back over
and over again and studied the provisions.
There are some problems with the bill that came out of the conference
bill. In many respects, it is not as good a bill as the bill we passed
out of the House. But for every problem in the bill, there are also
some good things in the bill. So, on balance, I have decided that this
is a bill that is worthy of support.
We should continue to work on the problems that exist with the bill.
We should address those problems dealing with privacy, reporting under
the CRA requirements, and other provisions that I think are lacking.
But on balance, we should vote for the bill, and, therefore, I rise
in support of the bill.
Mr. LEACH. Madam Speaker, I yield 45 seconds to the gentlewoman from
Illinois (Mrs. Biggert).
(Mrs. BIGGERT asked and was given permission to revise and extend her
remarks.)
Mrs. BIGGERT. Madam Speaker, I rise in support of the conference
report. Many of my colleagues have devoted a good part of their
congressional careers to making this bill a reality.
As a freshman member of the Committee on Banking and Financial
Services, I was privileged to work with them this year to provide a
bipartisan bill that will modernize our Nation's banking, insurance,
and security industries.
Two decades in the making, this bill will allow our Nation's
financial institutions, security companies, and insurance industries to
successfully compete in the global market.
I commend the House and the Senate conferees as well as the
administration who were able to work together to approve this
legislation. While it may be long overdue, I believe it will be well
worth the wait.
I congratulate the gentleman from Iowa (Chairman Leach), the
gentleman from Virginia (Chairman Bliley), and the gentleman from New
York (Mr. LaFalce), the ranking member.
I ask all my colleagues to vote for this historic measure, and I urge
the President to sign it into law.
Mr. DINGELL. Madam Speaker, I yield 1\1/2\ minutes to the
distinguished gentleman from Illinois (Mr. Gutierrez).
Mr. GUTIERREZ. Madam Speaker, I am a proponent of the Community
Reinvestment Act, which is why I am going to vote against this
conference report.
I am not pleased that S. 900 weakens the Community Reinvestment Act
while strengthening banks' abilities to expand into insurance and
securities business. I am not pleased that S. 900 sacrifices adequate
consumer privacy for the sake of corporate interests.
S. 900 strays too far from acceptable CRA provisions originally in
H.R. 10, which required banks to have a satisfactory CRA rating in
order to affiliate with insurance and securities firms, and this is
important. To maintain that affiliation, they must maintain their
satisfactory CRA rating. Unfortunately, this maintenance provision has
been stripped from the bill.
Sure, S. 900 requires banks to have a satisfactory CRA rating to
expand into lines of business, but under this bill, once a bank's
affiliating frenzy is over, once it gets as big as it wants by merging
with securities and insurance firms, it is no longer required to
maintain a satisfactory CRA rating.
On privacy, this bill gives banks the right to share all information
about consumers with their affiliates. Personally, I do not necessarily
want my bank information to be shared with anyone.

{time} 2215

While S. 900 does give consumers the option to opt out of a bank's
information-sharing arrangement with unaffiliated third parties, a
consumer, I want America to understand this clearly, a consumer cannot
opt out when the financial institution enters a joint marketing
agreement with unaffiliated third parties.
This means that if my bank has an agreement with a telemarketer down
the street, the bank can share my information and the information of
all Americans with whichever financial institution. That should be
shameful, Madam Speaker.
Mr. LaFALCE. Madam Speaker, I yield 2 minutes to the gentlewoman from
Oregon (Ms. Hooley).
Ms. HOOLEY of Oregon. Madam Speaker, I want to thank the chairman of
the Committee on Banking and Financial Services and the ranking member
for the hard work they did on this bill and moving it through the
process and never forgetting that the consumer came first.
Madam Speaker, with all the heated debate around the details of this
bill, I fear that we have lost sight of what we are trying to do. We
are, as the Washington Post recently pointed out, trying to reregulate
the financial services industry today, not deregulate it. Banks already
use loopholes and regulatory waivers to get their hands into new lines
of businesses, supposedly barred by the old Glass-Steagall Act. While
this bill gives banks, insurance companies, and security companies new
powers, it also creates a sound, legal framework which addresses the
actual condition of today's financial services marketplace.
For those of my colleagues that are concerned about consumer
protection, understand that the most important thing we can do to
protect consumers is to create a strong regulatory system that oversees
financial services as they are today, not as they were, and the bill
does that.
Why else have we worked so hard to create this bill? For four
reasons: to create a more competitive financial services sector, to
build a stronger economy, to create new opportunities for consumers,
and to protect the consumer.
When this bill is passed, companies will be more internationally
competitive, will operate more efficiently at home, and will provide a
broad array of new services and products to the consumers, and provide
for the first time privacy protection for the consumer.
As a conferee and a supporter of S. 900, I ask for my colleagues' yes
vote today.
Mr. DINGELL. Madam Speaker, how much time do we have remaining?
The SPEAKER pro tempore (Mrs. Emerson). The gentleman from Michigan
(Mr. Dingell) has 11\1/2\ minutes remaining, the gentleman from New
York (Mr. LaFalce) has 11 minutes remaining, and the gentleman from
Iowa (Mr. Leach) has 2 minutes remaining.
Mr. DINGELL. Madam Speaker, I yield 1\1/2\ minutes to the gentleman
from Minnesota (Mr. Luther).
Mr. LUTHER. Madam Speaker, earlier this year, Attorney General Mike
Hatch of the State of Minnesota brought a civil lawsuit against a large

[[Page H11537]]

national bank for sharing customers' personal information with a
telemarketing company. When this became known to the public, the people
of Minnesota were outraged. So what happened? The bank quickly agreed
to change its practices and to allow their customers to opt out; in
other words, to say no to sharing any personal financial information
with either third parties or affiliates.
I ask all of my colleagues here to pay attention to the Minnesota
agreement, because that is what everyone agreed to when the public
truly found out what was going on with the sharing of their
information. It is the minimum standard every bank in America ought to
adhere to. All it says is people have the right to say no.
Now, this legislation has been going on for 15 years, as has been
mentioned here. I would ask why, after that much time, could we not
spend 15 minutes to draft a provision to protect the consumers of
America? And that is all we are asking. For those of my colleagues who
suggest we could pass a separate bill on the privacy issue, I ask, what
are the chances of passage of that bill when this bill cannot have a
real privacy provision with all of the interest groups supporting this
legislation? The chances of that would be very slim.
Madam Speaker, I will conclude by just saying it is time to reject
business as usual in Washington. We can stand up for the people and
their right to privacy in America. We have a solemn responsibility to
do that. I urge my colleagues to reject this legislation.
Mr. LaFALCE. Madam Speaker, I yield 1 minute to the gentlewoman from
California (Mrs. Capps).
Mrs. CAPPS. Madam Speaker, I rise in support of this conference
report. The laws governing our banking insurance and securities
industries are woefully out of date. Congress has tried for years to
update them and that goal is finally now being achieved with this
legislation. This bill will ensure that America remains the world's
leader in financial services and, more importantly, it will bring
consumers more choices at lower prices.
We all know, though, that a major issue in this bill has been
consumer privacy. The legislation before us takes a step forward, but
many challenges remain. I am pleased that the conference report does
not include the so-called medical privacy provisions that were in the
House-passed bill. But the conference report remains deficient in
protections for consumers' financial privacy.
As the gentleman from Michigan (Mr. Dingell) and the gentleman from
Massachusetts (Mr. Markey) have pointed out, the bill still does not
allow consumers control over who has access to their financial
information. Therefore, Congress must revisit privacy protections.
However, overall the conference report remains a positive step forward
for our economy, and I urge my colleagues to support it.
Mr. DINGELL. Madam Speaker, I yield 1 minute to the gentlewoman from
Illinois (Ms. Schakowsky), a member of the Committee on Banking and
Financial Services.
Ms. SCHAKOWSKY. Madam Speaker, as a member of the Committee on
Banking and Financial Services, I rise in strong opposition to S. 900.
Winners-Losers. In this bill it is painfully clear. Banks, insurance
companies and securities firms. Big winners. Losers? Working class
communities and consumers.
This bill helps create corporations that can afford to ignore
families and small businesses down the street due to a weakened
Community Reinvestment Act. CRA has brought literally a trillion
dollars' worth of loans into starving communities since its passage in
1977. But S. 900 lowers the requirements for CRA compliance and
maliciously burdens community-based groups that are fighting for
investment in their neighborhoods.
Huge financial conglomerates get access to their customers' most
private information, which they can use without permission. When a
widow receives the funds from her husband's insurance policy, the
insurance company can share that information with its brokerage firm
which can then barrage the grieving woman with stock offerings.
The bank that gives us a loan for our child's education can sell her
address to a credit card company, which then entices her with a card at
school. If we have a bad day on the stock market, make a claim against
our health insurance, we can kiss that mortgage goodby. Write checks to
a psychiatrist or an oncologist and then just try to get a new health
insurance policy.
Why should we be for this? We should not be for this. I urge my
colleagues to vote ``no.''
Mr. LaFALCE. Madam Speaker, I yield 2 minutes to the gentleman from
Connecticut (Mr. Maloney).
Mr. MALONEY of Connecticut. Madam Speaker, I rise in support of this
legislation. For more than 20 years, Congress has attempted to overhaul
the Nation's banking laws while the marketplace has moved leaps and
bounds beyond the current law. Finally, today, we have an historic
opportunity, the opportunity to pass the most important financial
services legislation in 60 years.
Thanks to the work of the chairman, the gentleman from Iowa (Mr.
Leach), and the ranking member, the gentleman from New York (Mr.
LaFalce), we have come together to craft a financial modernization bill
which benefits everyone. Our economy will benefit from passage of this
bill by being supplied with more access to capital, which will continue
to fuel our economic growth. To our financial institutions, this bill
means increased efficiency and increased competitiveness in the global
marketplace. And our consumers will benefit from increased competition,
which translates into greater choices, more innovative services, and
lower prices for financial products.
Under today's financial modernization conference report, banks will
still be required to have a good track record in community
reinvestments as a condition for expanding into new businesses. And
there is the first time that a bank's rating under Community
Reinvestment Act will be considered when it expands outside of
traditional banking activities. The financial modernization agreement
will also apply CRA to all banks, without exceptions, and it preserves
existing procedures for public comments on banks.
A note on privacy. Under existing law, information on everything from
account balances to credit card transactions can already now be shared
by a financial institution without a customer's knowledge. Under this
bill, financial institutions will, for the first time, be required to
notify consumers when they intend to share such information with third
parties and allows consumers to opt out of any such information
sharing.
The privacy protections included in this legislation are clearly an
important step forward for America's consumers. I urge passage of the
conference report.
Mr. DINGELL. Madam Speaker, I yield 1\1/2\ minutes to the gentleman
from Washington (Mr. Inslee), a member of the Committee on Banking and
Financial Services.
(Mr. INSLEE asked and was given permission to revise and extend his
remarks.)
Mr. INSLEE. Madam Speaker, if we are indeed steward of our
constituents' privacy, why should we give banks the right to strip us
of privacy? Why should we give banks the ability to tell everyone in
the world who are their affiliates about our banking accounts and our
checks? Why should we do this?
And who will come to this floor tonight and say to the American
people that it is okay for banks to violate our privacy and to give our
bank accounts to their affiliates so they can telemarket us? Who will
come here tonight and say that? No one. Because every single Member of
this chamber, of both parties and both genders, of all beliefs, know
that is wrong, and it ought to be outlawed.
Why is this so important? Because this is a brave, new and
threatening world in the financial services industry. This is not the
little bank on the corner any more. The little bank on the corner did
not have any incentive to violate our privacy. They wanted to keep our
privacy. But when we create this new organism of banking, as sure as
God made little green apples, that the affiliated insurance companies
and the affiliated stockbrokers are going to want the computer
profiling of our accounts so they can sell everything on this green
Earth to us over the phone at 7 o'clock at night.

[[Page H11538]]

Now, many of us are concerned about the financial forces at work
trying to pass this bill. I will just leave my colleagues with one
thought. When consideration of deregulation of the savings and loan
industry came about, only 26 Members of this chamber voted against it,
and all 26 Members felt the same fear and concern we do.
Vote to send this bill back for more work. Vote for privacy. Defeat
this bill tonight.
Mr. LaFALCE. Madam Speaker, I yield 1\1/2\ minutes to the gentlewoman
from New York (Mrs. Maloney).
Mrs. MALONEY of New York. Madam Speaker, I rise in support of the
Gramm-Leach-Bliley Act.
To say that Glass-Steagall effectively separates banking and
securities is to ignore the realities of the marketplace. Today, banks
can buy securities firms and banks can sell insurance. This bill
provides legal and regulatory clarity.
While on the whole, the act makes U.S. companies more competitive, I
would like to have seen it improved in several areas. With regard to
privacy, the bill establishes the principle of Federal regulation of
consumer privacy for the first time. I would have liked to have seen
stronger language. In the conference, numerous amendments toughening
the privacy language were offered and defeated on largely party lines.
I look forward to returning to this issue next year.

{time} 2230

I would also have liked to have seen stronger CRAs, a goal toward
which the gentleman from New York (Mr. LaFalce), the ranking member,
ably fought. Even so, I believe the positives far outweigh the
negatives.
Perhaps most importantly, the conference committee upheld the strict
separation of banking and commerce, a goal which the gentleman from
Iowa (Chairman Leach) has long championed.
Madam Speaker, the markets have already overwhelmed the Glass-
Steagall wall. Gramm-Leach-Bliley will provide new modern rules
allowing U.S. companies to move forward and compete globally in the new
Internet economy.
I urge a yes vote.
Mr. DINGELL. Madam Speaker, I yield 1\1/2\ minutes to the
distinguished gentlewoman from California (Ms. Lee) a member of the
Committee on Banking and Financial Services.
Ms. LEE. Madam Speaker, I thank my colleague for yielding me the
time.
Madam Speaker, I rise in strong opposition to S. 900. There is no
question that we need to update 1930's laws on financial services. I
joined with many colleagues to try to craft a bill so that it would
also, however, protect consumers. Financial services are making big
gains with this bill, and consumers should be included. Unfortunately,
they have been left out.
For example, pro-consumer amendments offered were rejected by the
conference committee. Strong consumer privacy provisions were rejected
by the conference committee. It is terrifying to know that Big Brother
is here to stay as a result of this bill. Sharing the private financial
information among financial institutions should really scare us to
death.
My anti-redlining, non-discrimination amendment passed by the House
Committee on Banking and Financial Services was blocked from
consideration by this House without even taking a vote to block it.
What does that say about our democracy?
With regard to the Community Reinvestment Act, punitive reporting
required of community groups building affordable housing, for example,
will create unwarranted witch hunts. I wanted to cast an aye vote for
financial modernization but only if consumers, ordinary people, could
also benefit from these megamergers.
Unfortunately, the bill went in the wrong direction. I urge a no
vote.
Mr. LaFALCE. Madam Speaker, I yield such time as he may consume to
the gentleman from Maryland (Mr. Cardin).
(Mr. CARDIN asked and was given permission to revise and extend his
remarks.)
Mr. CARDIN. Madam Speaker, I rise in support of the conference
report, with reservations.
Congress has been working for many years to reform the Nation's
outdated financial services laws. After several attempts at crafting
comprehensive legislation, I am pleased to see that the House, the
Senate and the administration have reached agreement on a bill that
accomplishes this task, while preserving financial regulation along
functional lines. After 65 years, it is important that we modernize our
financial services laws. This legislation does provide the necessary
legislative framework to allow financial institutions to compete fairly
in the market. That is in the best interest of my constituents and I
shall support the conference report.
However, I must express my disappointment that the conference report
does not provide customers the opportunity to prevent the disclosure of
information to affiliated companies. It does allow them to opt-out of
disclosures to companies with whom their financial institutions have no
affiliation, except when the institutions have entered into a joint
agreement. This may result in the free exchange of personal
information, such as bank balances, credit card transactions, and check
receipts, between life insurance companies, mortgage issuers,
stockbrokers and other commercial entities without the consumer's
knowledge or consent.
This situation is particularly troubling because Congress has not yet
passed medical privacy legislation. It is important to recognize that
the HHS Secretary's proposed medical privacy regulations, set to take
effect next February, are restricted in scope to health providers,
health insurers, and health information clearinghouses. Limited by
legislative authority granted in HIPAA, these rules cannot limit the
secondary release of information beyond these specific entities.
Therefore, once this financial services bill becomes law, information
that an individual voluntarily discloses to a life insurance company
may then be forewarded legally without an individual's assent to any of
its affiliates and to any unrelated financial institution that has
entered into a joint agreement with that insurance company.
It is my hope that the 106th Congress and the administration will
return to this issue early next year in order to strengthen the privacy
safeguards. Only then will we be able to provide American consumers
innovation, convenience, and safety in financial services, as well as
guaranteeing the privacy of their most personal information.
Mr. LaFALCE. Madam Speaker, I yield 1 minute to the distinguished
gentleman from California (Mr. Sherman).
(Mr. SHERMAN asked and was given permission to revise and extend his
remarks.)
Mr. SHERMAN. Madam Speaker, banks, insurance companies, and stock
brokerage firms are combining today; and the old walls and distinctions
between financial products that fit in one area and another are
beginning to break down.
The question is not whether we will have the perfect bill but whether
we will have a bill at all. This bill requires that consumers are given
disclosure when they go into a bank that a particular product is not
FDIC insured. They have no such protection now.
It prevents the combination of financial and commercial enterprises
in a way that could endanger our entire financial system. It provides
modest privacy protections that we do not have under current statute.
We can wait for the perfect bill, turn our back, and watch the
combination of financial enterprises occur with nothing to ensure that
the public interest is protected, or we can instead vote for an
admittedly imperfect bill.
This is a major step forward in protecting the public interest.
Mr. DINGELL. Madam Speaker, I yield 1 minute to the distinguished
gentleman from Illinois (Mr. Davis).
(Mr. DAVIS of Illinois asked and was given permission to revise and
extend his remarks.)
Mr. DAVIS of Illinois. Madam Speaker, we have heard a great deal all
evening about how good this bill is. I agree, it is good. It is good
for the banks, good for the corporations, good for business, good for
small banks who want to be practically exempt from CRA. But it is not
good for consumers.
It is not good for consumers who desire privacy protection. It is not
good for disadvantaged and distressed communities that have been
redlined, discriminated against, raped, and abandoned. It is not good
for consumer activists who generated CRA in the first place. And so, it
is a good bill, but it is not good enough to protect CRA. It is a good
bill, but not good enough.
I urge that we vote to protect CRA. Vote against it.
Madam Speaker: we have heard from many quarters that this is a good
bill and in many ways it is. However, in several instances it

[[Page H11539]]

does not do what some suggest that it does. The so-called privacy
protection of customers being given an opportunity to ``opt-out''
clearly demonstrates the corporate benefits this bill intends. If this
bill will benefit consumers, let the corporations sell themselves by
mandating that consumers must ``opt-in'' to have information on
themselves shared or sold. Financial literacy is already faced with a
plethora of challenges let alone teaching consumers how to search for
obscure fine print to protect privacy. One key lost opportunity is the
failure to insist that expanded financial powers be accompanied by an
appropriate expansion of CRA.
The proposed small bank exam schedule borders on an outright
exemption given the ``twice a decade'' schedule proposed. I am also
afraid that some of the report language will discourage communities
from commenting or even contacting a financial institution regarding
their communities credit needs.
This bill will not further community reinvestment; therefore,
notwithstanding its other positive feature, I cannot support it.
Mr. LaFALCE. Madam Speaker, I yield 3\1/2\ minutes to the
distinguished gentleman from Minnesota (Mr. Vento), the ranking member
of the Subcommittee on Financial Institutions and Consumer Credit.
Mr. VENTO. Madam Speaker, I rise, of course, in strong support of
this. I certainly admire the passion and the intensity of our
colleagues that have presented arguments tonight in voicing their
concerns.
I think once we get through some of the rhetoric and hyperbole we
might get down to some of the facts. I think their arguments would seem
to steal defeat from the jaws of victory in terms of this is a pro-CRA
bill. It expands CRA. It does so, I think, in a way; and that was an
absolutely fundamental demand by the President.
I respect the fact that the gentleman from Iowa (Chairman Leach) and
the ranking member fought like lionesses over their cubs trying to
protect this and recognizing the necessity of doing it. This was the
last thing that we dealt with. It was tough. We have disclosure in
here. There are provisions with regard to reporting which I think are
onerous, but they are workable and we expand CRA.
Thousands of applications and thousands of other activities that went
on that did not need CRA will and every part and every branch of that
holding company will have to have a positive CRA rating in order to
accomplish it. In this bill, we put teeth back in the Fair Credit
Reporting Act which had been extracted several years ago. That is an
important consumer gain.
We have the Prime Act in here that the gentleman from Illinois (Mr.
Rush) and Senator Kennedy sponsored which is so important to our local
communities. There are a lot of good things in this bill. The activity
of the gentlewoman from Colorado (Ms. DeGette) with regards to spousal
abuse is in this particular bill.
But beyond that, of course, the privacy issue is the most interesting
issue of all, because many have raised this great facade, but 2 years
ago when a bill was up here and some of the advocates to it would have
allowed us with regards to being against this bill because it does not
have enough privacy protections in this found it in their wisdom and
hearts to vote for a bill that had none in it.
In Minnesota we talk about protecting that one bank because they
trespassed or were thought to have trespassed had to, of course, deal
with a CRA agreement or with regards to a privacy agreement. I am
concerned about that one bank, but I was concerned about the other 549
banks in Minnesota that did not have any law that would govern their
particular privacy.
This covers all the banks in the Nation and all the insurance firms
in the Nation and all the security firms in the Nation and all the
entities that are financial in nature are covered under this particular
bill in terms of a privacy policy.
Now, even though it has taken 6 years to pass this, guess what? Next
year we are going to have to do some more work. I hope that my
colleagues realize we have not worked ourselves quite out of a job here
yet. We may have some imperfections in this legislation, as there is in
others. And I will gladly confess that to my colleagues that we are
going to have to come back and do additional work in this particular
area. But we have a solid foundation.
The principal provisions of this bill which have recognized the
rusting and weakened and rotten chains of Glass-Steagall are finally
recognized, and Congress is getting out in front and rationalizing and
putting a policy in place in which our financial foundation, a
dysfunctional system, can work. That is what this is really all about.
I think in the process of doing so, we have advanced and improved
consumer provisions in this bill. We should be proud to vote for it and
proud to work for the results, not simply polarization that this
Congress I think too often has reflected. This year let us do something
positive, let us vote for this bill.
Madam Speaker, I rise in support of this conference report. This
agreement, reached in a difficult and wrangling 66 Member conference
between the two bodies with very different products, is a historic
bill.
The conference report on S. 900 is a balance. It is a balance between
the House-passed bill and the Senate-passed bill. It is a balance
between competing industries. It is a balance between bigger banks and
smaller banks. It is a balance between business and consumer needs. It
is a bill that does not allow us to continue to stick our heads in the
sand with regard to the state of the financial services industry and
instead brings the law up to date.
I worked upon and signed this conference report on S. 900, the
Financial Services Modernization Act, in an effort to pave a path for
the future that will provide financial opportunities for American
consumers and communities across this country and that will keep our
financial services sector competitive in the world economy.
We have a new law that will remove the rusted chains of Glass-
Steagall and that will help insure that consumers receive quality
financial services and new protections. The measure removes the
barriers preventing affiliation between banks, insurance and securities
entities and provides financial services firms the choice of conducting
certain financial activities in bank holding company affiliates or in
subsidiaries of bank structures on a safe and sound basis. The
agreement will not undermine the national bank charter vis a vis state
banks, foreign banks, or the activities of U.S. banks that have
subsidiaries abroad with relative powers.
The conference agreement brought resolution to the differences over
traditional bank securities powers. We have successfully shut down the
commercial loophole by prohibiting the sale of unitary thrifts to
commercial entities. Functional regulation has been established on
matter from insurance sales to antitrust/anti-concentration law
enforcement. Importantly, the bill enhances the viability of smaller
community banks and financial entities vital to extending services and
credit through our greater economy; rural and urban.
We do not have complete parity for affiliation between banks and
insurance and securities firms with regard to commercial activities
because of the 15 year grandfather provisions. We could have merged the
bank and thrift charters and merged the two deposit insurance funds
that remain separate in law today. I would have also hoped that we
could have included fair housing compliance on insurance affiliates,
low-cost banking accounts and application of Community Reinvestment
Act-like requirements on products that are similar to bank products,
such as mortgages. There are, however, no perfect bills produced
through the Congressional process with 535 views in the mix with the
Administration's phalanx of regulators and policy works.
The focus of the lengthy and public debate over this legislation has
been the opening of the financial services marketplace to new
competition and the reduction of barriers between financial services
providers. It is equally important that this bill is a positive step
for our constituents and the communities in which they live, as well.
In general, there are inherent benefits of being able to provide
streamlined, one-stop shopping with comprehensive services choices for
consumers. According to the Treasury Department, financial services
modernization could mean as much as $15 billion annually in savings to
consumers. Hopefully, some of these dollars will materialize. We also
have achieved other policy victories for consumers across the country.
We have modernized the Community Reinvestment Act (CRA) in a positive
manner. The CRA was enacted by Congress in 1977 to combat
discrimination. The CRA encourages federally-insured financial
institutions to help meet the credit needs of their entire communities
by providing credit and deposit services in the communities they serve
on a safe and sound basis--a basic reaffirmation of the purpose of
insured depository institutions. According to the National Community
Reinvestment Coalition, the law has helped bring more than $1 trillion
in commitments to these communities since its enactment. Across this
great

[[Page H11540]]

nation, organizations, belonging to NCRC, ACORN, LISC, Enterprise,
Neighborhood Housing Services, and others, have engaged CRA to work
with their local financial institutions to make their communities
better places to live.
Importantly, the conference agreement will continue to ensure that
CRA will remain essential and relevant in a changing financial
marketplace. It is not everything I wanted or supported during the
several amendments process. It does, however, further the goals of the
Community Reinvestment Act by requiring that all of a holding company's
subsidiary depository institutions have at least a ``satisfactory'' CRA
rating in order to affiliate as a Financial Holding Company or to
engage in any of the new financial activities authorized under this
Act. This strengthens and modernizes the reel of CRA in that current
law does not have a CRA satisfactory requirement for non-bank
activities in which banks now seek to engage. The Federal Reserve Board
has informed us that thousands of applications have been approved
without any CRA test that this bill will apply. Further, according to
the Treasury Department, if a bank were to proceed without having
a satisfactory CRA, the regulators have strong enforcement authority,
including monetary penalties, cease and desist and divesture, that they
could apply.

The Conference rightly rejected the other body's proposed small bank
exemption and safe harbor provisions for CRA. We did accept, however, a
modified disclosure and reporting system. I strongly disagreed with the
burdensome, so-called ``sunshine'' and reporting provisions in the
Senate bill. They certainly raise the specter of harassment of pro-CRA
groups. However, very few would oppose openness and public disclosure.
Certainly, the disclosure of information could spell out the
effectiveness of these groups working so hard in our communities and
the effectiveness of the CRA itself.
I believe the reporting requirements, although improved, remain an
extraordinarily difficult policy as structured in this measure. It no
doubt will be more of a burden to community groups and banks who
currently do not file such status reports. However, we were able to
streamline the reporting requirements and to limit who should file a
report even as we gave the regulators substantial authority to properly
oversee such provisions. We should be mindful of the Administration's
and regulators' expressions of good will to take a common sense
approach with regards to its implementation. Hopefully they will help
make these disclosure and reporting requirements more workable.
Congress certainly must closely monitor the implementation of these
provisions and their effects.
The conference report also contains two studies: one evaluating
business lines associated with CRA and another looking at the impact of
the changes or impact of this law on CRA. I am concerned about the
short turn-around time of the report required of the Federal Reserve
Board. I would hope that this important study of the default and
profitability of CRA loans will not be rushed to the point of not doing
an adequate or fair job solely to meet an arbitrary deadline. Further,
this study should be inclusive and identify all loans (individual,
commercial or other) or activities that would qualify or be given as
credit to financial institutions for CRA--and certainly not just to
those loads or actions that qualify under the CRA reporting provisions
of section 711 of the Act.
Other positive consumer provisions include the requirement that
institutions ensure that consumers are not confused about new financial
products, along with strong anti-tying and anti-coercion provisions
governing the marketing of financial products. A new program to provide
technical assistance to low income micro-entrepreneurs, known as the
PRIME act, will be created with enactment of this Conference Report.
ATM fees will have to be fully disclosed to consumers, not only on the
computer screen, but, also on the ATM machine itself.
I am disappointed that the conference committee rejected provisions I
initiated which encouraged public meetings in the case of mega-mergers
between banks which both have more than $1 billion in assets where
there may be a substantial public impact because of the larger merger.
This would have provided our constituents with the important
opportunity to express their views regarding mega mergers and their
impact in our communities.
As my colleagues are aware, this conference report contains landmark
financial privacy protections for consumers. Today, there is no federal
law to protect your privacy or to stop the sale or sharing of your
financial records with third party companies. As many in my home state
of Minnesota learned this year, not even credit card numbers are safe
from telemarketers unless we act in the conference report to put in
place substantive law.
With enactment of this agreement, Congress will give consumers real
choices to protect their financial privacy. This conference report will
provide some of the strongest privacy provisions to ever be enacted
into any federal law. This agreement, based upon the strong House
provisions that I helped draft, has an affirmative mandate upon all
financial entities, whether federal or state, so that all banks,
brokers, insurance companies, credit unions, credit card companies, and
many others must protect your personal financial information.
Furthermore, consumers will have an important choice of ``opting-
out'' of most information sharing with unaffiliated third parties.
Financial institutions will no longer be able to share your customer
account numbers or access codes with unaffiliated third parties for the
purpose of telemarketing. When you open an account and each year
thereafter, you will receive a full disclosure of the privacy policies
of your bank, credit union, securities firm, mutual funds or insurance
companies. If the policy is not strong enough, this gives you the
choice to choose a new company or to communicate your concerns to that
financial enterprise.
Importantly, this conference agreement provides that financial
institutions have an affirmative responsibility to protect and respect
your financial privacy. Federal regulators are given the authority to
set standards which guide the regulated and which will protect the
security and confidentiality of a customer's personal information.
We were successful in improving upon the House provisions by agreeing
to allow states to give even more privacy protection to consumers at
their discretion. Stronger state laws will not be preempted by this
federal law. The agreement also strengthens the Fair Credit Reporting
Act, giving bank regulators the ability to detect and enforce any
violations of credit reporting and consumer privacy, reestablishing
regulatory provisions and the related enforcement powers essential to
the same.
For the purposes like servicing accounts, ordering checks, selling
loans to the secondary market, giving consumers frequent flyer miles
and complying with federal laws, the agreement sets out exceptions. In
crafting regulations to implement this law, the regulators should do
nothing to further any sharing of account numbers or encrypted access
codes which is not expressly conveyed through ``opt-in'' permission
from consumers prior to any activity that would share such numbers.
Further, the regulators should not make any exemptions that would make
it possible for consumers to opt in over the phone to a telemarketer
regarding the sharing of their account number. Condoning such a
practice would simply reaffirm the status quo with regard to those bad
actors who would take advantage of the practice and avoid the clear
intent of the law.
As the regulators begin to shape appropriate exceptions in
regulation, I entreat them to look carefully at the statute and to the
clear intent to limit exceptions. Sharing with third parties outside of
the scope of these limited exceptions should not be allowed. The
legislation does attempt to provide some competitive equality to
smaller institutions vis a vis larger affiliated structures without
providing loopholes which would invade consumers financial privacy. The
regulators should not provide exceptions merely to make something
easier for financial institutions when it comes at the expense of the
knowledge and benefit of consumers.
Some have suggested that these major new privacy protections be
jettisoned because they do not go far enough. Rejection would make
these unprecedented good privacy protections the enemy of a skewed
version of what is best. To reverse the major strides made by this
legislation is to steal defeat from the jaws of victory. If Congress
says ``no'' to these new privacy provisions, the result would be
business as usual. Tacitly agreeing to sell your credit card numbers to
telemarketers and permitting your financial data to float around the
open market like the latest trade item on eBay would be a set back for
privacy.
Madam Speaker, what is clear is that a law that requires consumer
action is appropriate but third party and affiliate ``opt-out'' is
hardly the first and last word in consumer rights. We can do more and
can do better. The fact is that a number of consumers have such a right
of ``opt-out'' today under Fair Credit Reporting Act or through
voluntary institution policies. Even with that opportunity in law and
practice, only a small fraction of individuals, less than 1 percent,
exercise that option. Consumer choice may give us a positive feeling of
control and remedy but what does it really accomplish--what is the
bottom line? Does it provide results if only a fraction of 1% respond
to the celebrated ``opt-out''?
I do want to note something on the medical privacy provisions that
were deleted from the House-passed bill, H.R. 10, in this conference
report. Mindful of the deep concerns raised by our colleagues on the
Commerce Committee and many other outside the Congress, we finally
deleted these admittedly less than perfect provisions in the bill in
lieu of improving them. The House approved a convoluted motion to
instruct the conferees to do as much.

[[Page H11541]]

I had and still have concerns about the leap of faith that this
action--deleting the provisions--required. I hope that we will not be
disappointed a I note the recriminations that have already been voiced
by some.
I am pleased that the President has recently proposed comprehensive
privacy provisions as a result of the Health Insurance Portability and
Accountability Act of 1996 (HIPAA) law and hope that they will provide
the protection we sought to assure and that there are no loopholes for
medical privacy with regard to financial institutions. Consumers should
not be forced to disclose and make public private medical data just to
get insurance coverage. Although this legislation creates a new
affiliated bank holding company structure that allows insurance,
banking and securities firms to join, that must not translate into
misuse and abuse of medical records by insurance companies and
affiliates. No one should be able to share private medical or genetic
information to base credit upon or for other unrelated purposes.
Madam Speaker, we have been in the trenches on this bill for the last
five years, following more than 20 years of debate on financial
modernization. We are at the goal line. I again want to express my
appreciation to Chairman Leach, Ranking Member LaFalce, Chairwoman,
Roukema, our counterparts in the Senate, and all the respective staff,
especially my personal staff, Larry J. Romans, Kirsten Johnson-Obey,
and Erin Sermeus for their outstanding work, cooperation and patience
on this important legislation. We worked hard together to create a
bipartisan product that has gained the support of the Administration
and that overcame the polarized Senate-passed measure. The Financial
Services Modernization Act of 1999 is a tremendous achievement, if
bittersweet from some reasons mentioned. It is a solid foundation to
build our economy upon as we move into the next century. I urge my
colleagues to support the conference report.
Mr. DINGELL. Madam Speaker, I yield 1 minute to the distinguished
gentleman from New York (Mr. Hinchey).
Mr. HINCHEY. Madam Speaker, it occurs to me that the one salutary
aspect of this bill is that it may finally provide the momentum to move
us to change the way we finance political campaigns.
This bill, if nothing else, is a brilliant billboard for campaign
finance reform. Seldom before has so much money been spent by so few to
the detriment of so many. If we just look at the aspects of privacy
alone, we see what is going to happen to people in this country. This
bill creates huge conglomerates, enormous financial trusts, and it
allows those financial trusts and conglomerates to manipulate
information back and forth inside of those conglomerates and outside
with unaffiliated entities as well with whom they share marketing
agreements.
People will be reduced to objects locked in amber, to be examined
minutely and manipulated carefully and intricately to deprive them of
their financial resources. It is a mass movement of money from one
class to another. It is a bad bill.
The SPEAKER pro tempore. The Chair would like to announce that the
gentleman from Iowa (Mr. Leach) has 2 minutes remaining, the gentleman
from New York (Mr. LaFalce) has 2 minutes remaining, and the gentleman
from Michigan (Mr. Dingell) has 4 minutes remaining.
Mr. DINGELL. Madam Speaker, I yield 2 minutes to the distinguished
gentleman from Massachusetts (Mr. Frank).
(Mr. FRANK of Massachusetts asked and was given permission to revise
and extend his remarks, and include extraneous material.)
Mr. FRANK of Massachusetts. Madam Speaker, this is half a bill, and
it is not enough. It does a very good job of creating the conditions in
which the capitalist institutions can flourish, and that is a good
thing. We want capital to move freely. We give the financial
institutions everything they have asked for.
Having done that, it is especially inappropriate that this bill
treats Community Reinvestment Act institutions, volunteers, lower-
income people, people concerned about equity, as if they were suspect.
Now, the ranking members of the committees in the House and the Senate,
the gentleman from New York (Mr. LaFalce) and Senator Sarbanes, tried
to prevent this from happening, but they were not successful given the
odds that they faced.
This bill is a very significant expansion of financial institution
activity, and it is a grudging recognition of CRA. Indeed, as the banks
are deregulated and give more freedom, low-income volunteers who put
effort into trying to preserve some social fairness in their
communities are burdened with excessive regulation.
It is entirely unfair for us in this piece of legislation to express
unbounded confidence in the ability of the financial institutions to
make our lives better and at the same time express suspicion of
community investment groups. Because that is what this bill does. It
treats them, over the objections of many, but, nonetheless, it treats
them as if they were suspect. It deregulates the banks and over-
regulates people whose only crime was to offend powerful political
interests because they cared about equity.
It is a paradigm of a mistake we make too often here. Yes, we should
create the conditions in which capitalism can grow and enrich us all.
But we should know by now that capitalism alone, the movement of
capital, unbounded will create wealth but it will create inequities, it
will create social problems.
And we must always be careful to accompany that, it is a lesson we
should have remembered from Franklin Roosevelt, we should accompany
that by measures which empowers those who are trying to offset some of
the ill effects, who are trying to preserve some social justice.
This bill does not do this. It gives a complete Christmas list to the
financial institutions but treats the people who are trying very hard
to preserve some equity and some social justice as children who would
misbehave. We should do better and we should reject this bill and try
it.
Madam Speaker, I ask that the very thoughtful letter explaining how
this bill weakens the Community Reinvestment Act be printed here.

November 4, 1999.
Congressman Barney Frank,
House of Representatives, Rayburn House Office Building,
Washington, DC.
Dear Congressman Frank: Having tracked the so-called
``financial modernization'' legislation currently pending
before you through both the House and Senate over the last
two years, we are writing to strongly urge you to vote
against the passage of this bill.
This legislation stands to dramatically alter the nation's
financial services industry by allowing cross affiliation and
redistributing powers among banks, securities, and insurance
companies. Despite serious misgivings regarding the impact
this bill would have on low and moderate-income communities
and communities of color, we might have been willing to
accept these changes if Congress simultaneously agreed to
modernize the Community Reinvestment Act of 1977 (CRA).
Currently applicable only to banks, the CRA might have been
strengthened by extending this obligation to securities and
insurance companies as well as newly authorized Wholesale
Financial Institutions. This would have allowed communities
like the ones we represent to build on the success of the
bank. CRA that has helped to generate critically needed
dollars for home mortgages, rental housing, and commercial/
industrial real estate development.
We recognize that, throughout this debate, supportive
legislators--including members of the Massachusetts
delegation--worked to support CRA and to limit the damaging
changes demanded by Senator Phil Gramm (R-Texas) and other
opponents. We therefore very carefully reviewed the
complicated changes that were finally adopted in the
conference committee report. Unfortunately, we have reached
the conclusion that they do not adequately serve the needs of
the low and moderate-income families and individuals who live
in the communities we serve.
Specifically, the current bill would hurt these communities
by:
--allowing cross affiliation between financial service
companies without giving the public opportunities to provide
input through an application process. The House version that
passed earlier this year would have required public hearings
for cross industry mergers and very large bank mergers. This
language is no longer included in the bill.
--allow cross affiliation without extending CRA
requirements beyond banks. It is therefore possible for
critical and substantial lines of businesses to be shifted
away from banks and away from any CRA responsibility.
--requiring no effective penalty for banks that cross
affiliate and do not maintain a Satisfactory or higher CRA
rating. Language previously included in the conference
committee report allowed federal regulators to require
divestiture for failure to maintain a minimum Satisfactory
CRA rating. This language has been removed. Even if effective
penalties were included, the provision requiring bank
affiliates to maintain a Satisfactory CRA rating is of
limited use--98% of all banks meet this standard because
the regulations require minimal CRA activities

[[Page H11542]]

comparable to a bank's competitors. Often, banks can
achieve such a rating despite an obvious lack of adequate
performance and a failure to substantially invest in low
and moderate-income and minority communities.
--damaging the current CRA at its foundation by extending
the examination cycle for all small banks. Federal
examinations already lag behind the current schedules, often
by 18 or more months. Small banks, particularly in rural
areas, often need the most encouragement through a public
input process to help identify and meet the needs of the low
and moderate income communities.
--damaging the core of the CRA by significantly
discouraging public input into a bank's future CRA
activities. Because of the broad scope of the so-called
``sunshine'' provision, anyone who even raises the issue of
CRA with a bank and subsequently succeeds in developing a
cooperative and meaningful (i.e., more than $10,000 value)
CRA agreement with that bank will be subject to burdensome
reporting requirements under severe penalties. Federal
regulatory agencies that often cite the lack of CRA comments
in a bank's public file may soon be hard pressed to find even
a handful from those organizations who risk the cost of
scrutiny. This will lead to less information generated,
particularly from small grassroots organizations, and
possibly even more inflated CRA ratings.
--providing no regulatory monitoring or enforcement of CRA
commitments by banks even if they are cited as a reason for
approval for applications by the regulatory agency. For
example, in a recent case the Federal Reserve cited Fleet
Bank and BankBoston's $14 billion CRA commitment as a reason
to approve their merger. Yet, the Fed would have no
meaningful ability to oversee this commitment and to
encourage compliance.
In summary, while this legislation may not sound the death
knell for CRA, it does weaken its future health so
substantially that we must urge you to oppose its passage.
Sincerely,
Marc D. Draisen,
President/CEO, Massachusetts Association of CDCs.
Tom Callahan,
Executive Director, Massachusetts Affordable Housing
Alliance.
Aaron Gornstein,
Executive Director, Citizens Housing and Planning
Association.

Mr. DINGELL. Madam Speaker, I yield myself the remaining time for
purposes of closing.
Madam Speaker and my colleagues, I think we ought to look at what we
are doing here tonight. We are passing a bill which is going to have
very little consideration, written in the dark of night, without any
real awareness on the part of most of what it contains.
I just want to remind my colleagues about what happened the last time
the Committee on Banking brought a bill on the floor which deregulated
the savings and loans. It wound up imposing upon the taxpayers of this
Nation about a $500 billion liability. That is what it cost to clean up
that mess.
Now, at the same time, the banks by engaging in questionable
practices wound up in a situation where the Fed and the Treasury
Department had to bail them out also at the taxpayers' expense. But it
did not show.
Having said that, what we are creating now is a group of institutions
which are too big to fail.

{time} 2345

Not only are they going to be big banks, but they are going to be big
everything, because they are going to be in securities and insurance,
in issuance of stocks and bonds and underwriting, and they are also
going to be in banks. And under this legislation, the whole of the
regulatory structure is so obfuscated and so confused that liability in
one area is going to fall over into liability in the next. Taxpayers
are going to be called upon to cure the failures we are creating
tonight, and it is going to cost a lot of money, and it is coming. Just
be prepared for those events.
You are going to find that they are too big to fail, so the Fed is
going to be in and other Federal agencies are going to be in to bail
them out. Just expect that.
With regard to the privacy, let us take a look at it. We are told
about all the protections for privacy that you have here. If you want
to have a good laugh, laugh at it, because here is the joke: The only
thing the banks are going to be required to say with regard to what
they are going to do with regard to your privacy, and this is
everything, from your health to your financial situation, to everything
else, is ``we are going to stick it to you.'' The privacy that you are
going to have under this legislation is absolutely nothing. And what is
going to drive that is going to be a simple fact, and that is that the
banks are all going to be competing with the most diligence, and the
result will be that those protections are going to be manifested in a
race to the bottom.
Consumers, investors and the American public will have no protection
to their privacy whatsoever under this bill. The only thing the banks
have to say and the other institutions have to say is ``we are going to
stick it to you.''
Vote against the conference report.
Mr. LaFALCE. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, first of all, we are about to vote on a bill, a bill
voted on earlier today and passed by the Senate 90 to 8. Insofar as my
Democratic colleagues are concerned, 38 Democratic Senators voted yes,
7 voted no.
There seems to be unanimity of opinion that we should repeal Glass-
Steagall. There is a difference of opinion though about certain other
provisions.
Let me try to point out something quite clearly: This phenomenon of
merger and acquisition is taking place today thousands and thousands of
times, but without the consumer protections that we have in this bill,
without the extension of CRA that we mandate in this bill, without the
privacy protections that we create for the first time under Federal law
in this bill.
Horror stories have been presented. Those horror stories exist under
present law. We change that in considerable part. We do not go as far
as the gentleman from Michigan (Mr. Dingell), the gentleman from
Massachusetts (Mr. Markey) and I would like to go, but I am not going
to let our desire to go much further preclude us from a reality, the
reality that we go farther today in protecting privacy than we ever
have before, and it goes significantly.
With respect to CRA, a Senate staffer walked out of the final
conference deliberations, the Senate staffer who opposed the nomination
of Jerry Hawke, because he was not strong enough on CRA, as the present
Democratic Comptroller of the Currency, and he said the Senate caved on
everything. They would have repealed CRA for small banks; they caved on
that. They would have created a safe harbor provision; they caved on
that. They would have created intimidation and harassment with respect
to their disclosure and reporting requirements; they caved on that.
They would have said you could not examine banks. We insisted upon
full, total, regulatory discretion to examine any bank whenever there
is reasonable cause to do so. The Senate caved on that.
This is a victory for the consumer, for communities, and for the
modernization of our financial services industry.
Mr. LEACH. Madam Speaker, I yield myself the balance of my time.
The SPEAKER pro tempore (Mrs. Emerson) The gentleman from Iowa is
recognized for 2 minutes.
Mr. LEACH. Madam Speaker, with change there are always doubts, but
what is the truth about this bill? Let me affirm what the gentleman
from New York (Mr. LaFalce) and the gentleman from Minnesota (Mr.
Vento) have just noted. This bill solidifies, rather than weakens, CRA.
No bank is exempted from community reinvestment responsibilities. No
bank may take on any new powers without a satisfactory CRA rating. All
banks must maintain a continuing CRA obligation. If not, if any fall
out of compliance, no new activities or acquisitions will be allowed.
Regarding privacy, let me say that seldom has this body heard such
doubtful hyperbole. This bill, for the first time, bars financial
institutions from disclosing customer account numbers or access codes
to unaffiliated third parties for telemarketing purposes. This bill,
for the first time, enables customers of financial institutions to opt
out of having their personal financial information shared with
unaffiliated third parties. This bill, for the first time, makes it a
Federal crime punishable by up to 5 years in prison to obtain or
attempt to obtain private customer financial information through
fraudulent or deceptive means.

[[Page H11543]]

These provisions apply to banks, securities companies and insurance
firms. They also apply to mortgage companies, finance companies, travel
agencies and credit card companies.
As far as enforcement, the act subjects financial institutions to
punishments that include termination of FDIC insurance, removal of
officers and civil penalties up to $1 million or 1 percent of the
assets of the institutions. These provisions are powerful. The
penalties are severe.
To vote against this legislation is to vote against the most powerful
privacy provisions ever brought before this floor. This is a balanced,
pro-consumer, pro-privacy bill, and I urge its adoption.
Ms. JACKSON-LEE of Texas. Madam Speaker, today I rise in support of
H.R. 10, the Financial Services Competition Act of 1999 and S. 900 the
Financial Services Modernization Conference Report. I would
additionally like to acknowledge the hard work of the Banking and
Commerce Committees, as well as the House-Senate conferees. However, I
would be remiss if I did not mention some of the important concerns
that I also have with this legislation. First, let me mention some of
the positive aspects of the bill. I support the idea of updating the
rules that our Nation's financial institutions operate under to bring
their activity in line with the realities of life in today's America.
Today's report represents groundbreaking financial services
legislation that would dismantle many of the Depression era laws
currently hindering the financial services industry from engaging in a
modern global marketplace. This measure would further permit
streamlining of the financial service industry thereby creating one-
stop shopping with comprehensive services choices for consumers. This
streamlining of financial services will not only mean increased
consumer confidence, it would also mean increased savings for
consumers. The Treasury Department estimates that financial services
modernization could mean as much as $15 billion annually in savings to
consumers.
Many provisions of the Community Reinvestment Act (CRA) remain in the
conference report. The CRA, enacted in 1977 to combat discrimination in
lending practices, encourages federally insured financial institutions
to help meet the credit needs of their entire communities by providing
credit and deposit services in the communities they serve. Indeed, in
many respects, the conference report strengthens the CRA. Under this
measure, CRA would be extended to the newly created wholesale financial
institutions, which are institutions that could only accept deposits
above $100,000 and are not FDIC-insured. Additionally, the conference
report, provides consumer protection provisions that require
institutions to ensure that consumers are not confused about new
financial products along with strong anti-tying and anti-coercion
provisions governing the marketing of financial products. Further, the
bill requires that all of a holding company's subsidiary depository
institutions have at least a ``satisfactory'' CRA rating in order to
affiliate as a financial holding company and in order to maintain that
affiliation.
Madam Speaker, CRA is a success story. Between 1993 and 1997, the
number of home purchase loans to African-Americans soared 62 percent;
Hispanics saw an increase of 58 percent, Asian-Americans nearly 30
percent; and loans to Native Americans increased by 25 percent. Since
1993, the number of home mortgages extended to low- and moderate-income
borrowers has risen to low- and modern-income borrowers has risen by 38
percent. Indeed, in my District, Hispanic students from the East End
District of Houston historically have had a high dropout rate. Using
funds made available by the CRA, the Tejano Center for Community
Concerns built the Raul Yzaguirre School for Success to meet the
special needs of students from low-income families in this inner-city
neighborhood. This school has performed outstandingly in its 3 years in
existence. In fact, over the past 2 years, the school's students
average Texas assessment of academic skills scores increased 18 to 20
percent.
Madam Speaker, while I am happy with the protections granted to CRA
by this Financial Modernization Conference Report I also have serious
concerns. This bill does not contain a CRA sunshine provision, which is
the most troublesome part of the bill for many community groups. This
may have a profoundly chilling effect on community groups' efforts to
forge partnerships with banks in their local communities. This bill
also falls short of increasing protections to CRA by rewriting the
rules for the financial services industry, thus, creating a new
creature called a financial holding company, with tremendous new
powers. I hope that this new entity will meet the financial service
needs of low and moderate income and minority Americans. This bill also
falls short in adequately protecting customers of banks affiliated with
insurance companies that have a track record of illegal discrimination
under the Fair Housing Act.
Additionally, the conference report does not extend the CRA to non-
banking financial companies that affiliate with banks. Specifically,
the conference report does not require securities companies, insurance
companies, real estate companies and commercial and industrial
affiliates engaging in lending or offering banking products to meet the
credit, investment and consumer needs of the local communities they
serve. The exclusion of nonbank affiliates' banking and lending
products from the CRA is significant because businesses such as car
makers and credit card companies, securities firms and insurers are
increasingly behaving like banks by offering products such as FDIC-
insured depository services, consumer loans, as well as debit and
commercial loans. Additionally, private investment capital is
decreasingly covered by CRA requirements. Making it more difficult for
underserved rural and urban communities to access badly needed capital
for housing, economic development and infrastructure.
Madam Speaker, I am also troubled by the fact that the conference
report did not address key concerns by Democrats to address issues such
as redlining, stronger financial and medical record privacy safeguards
and community lending. There is a study however, included in the
conference report that calls for the Treasury Department of look at the
extent to which services have been provided to low-income communities
as a result of CRA. This study will be due 2 years after the enactment
of this bill. If this study shows that this bill has had a negative
impact on low income communities I will revise my position for this
bill.
Lastly some of the other provisions of this conference report that I
support are the domestic violence discrimination prohibition which
states that the status of an applicant or insured as a victim shall not
be considered as criterion in any decision with regard to insurance
underwriting; the privacy protection for customers information of
financial institutions provision; the study of information sharing
among financial affiliates; and the fair treatment of women by
financial advisers. Both our financial service laws and consumer
protection laws need to be modernized. On balance, the measure, is a
positive step in the right direction to achieve this goal. I urge my
colleagues to join with me in supporting this bill.
Mr. LEVIN. Madam Speaker, today, we are considering a measure which
is long overdue. The Financial Services Modernization Act will help
keep the American finance industry competitive and at the same time
provide one-stop shopping for consumers. I recognize that the bill the
House is debating today is the product of nearly 20 years of effort and
compromise. It is a good bill, but it is not a perfect bill.
In particular, I want to comment on two key sections of this bill.
The provisions of this bill dealing with the Community Reinvestment Act
(CRA) ensure the continuation of this vital program, but they could
have been stronger. Under this agreement, the Community Reinvestment
Act will continue to apply to all banks. Further, for the first time a
bank's rating under CRA will be considered when it seeks to expand into
new financial activities. However, I would have liked to see more banks
covered under the CRA. The $250 million asset threshold in the
conference report has the effect of giving too many banks a 5-year
``safe harbor'' from CRA examinations. The conferees would have done
better to hold to the more reasonable $100 million threshold included
in the House-passed bill.
I am also concerned about the privacy protections contained in this
legislation. In a word, these protections are inadequate. Consumers
should have the right to control who has access to their personal
financial information. The privacy provisions contained in this
legislation are an improvement over current law, but they don't go far
enough. It is vital that Congress take additional steps to address this
concern and I look forward to working with my colleagues on this.
Despite these concerns, I want to compliment the extraordinary effort
that went into crafting this compromise. I urge my colleagues to
support the Conference Report on Financial Services Modernization.
Mr. WAXMAN. Madam Speaker, the ``Statement of Managers'' on the
financial services modernization bill, S. 900, contains an inaccurate
description of the medical records provision that was in the House
version of the bill, H.R. 10, but not in S. 900. The statement claims
that the provision ``requires insurance companies and their affiliates
to protect the confidentiality of individually identifiable customer
health and medical and genetic information.'' In fact, the medical
records language in H.R. 10 represented a major invasion of the privacy
of millions of Americans.
The language would have allowed health insurers to disclose health
records without the consent or knowledge of the affected individual for
a broad range of purposes, none of which were defined in the bill.
These purposes

[[Page H11544]]

included ``insurance underwriting,'' ``participating in research
projects,'' and ``risk control,'' among a long list of others.
Under H.R. 10, any health insurer could have sold or disclosed the
records of its patients to any health, life, disability, or other
insurance company without the individual's knowledge or consent. The
provision also allowed health insurers to sell or disclose patient
records for any ``research project,'' whether it was research into
credit ratings of the patients or research of mental health services to
Members of Congress.
The medical records language in H.R. 10 also excluded essential
privacy protections. For example, the provision failed to place any
restrictions on law enforcement access to health records; provide
individuals the right to access or inspect their health records;
provide individuals the ability to seek redress when their privacy
rights are violated; or prevent entities that obtained health
information under the bill from redisclosing the information to third
parties, including to employers, to newspapers, or for marketing
purposes.
Because of the serious flaws with H.R. 10's medical records
provision, groups representing millions of individuals across the
country opposed the language. Physicians, nurses, patients, consumers,
psychiatrists, other professional mental health counselors, and
employees groups, as well as privacy advocates, and organizations
representing individuals with disabilities, individuals with rare
diseases, individuals with AIDS, and senior citizens, among others, all
opposed this language. These groups included the American Medical
Association, the American Psychiatric Association, the American Nurses
Association, the Christian Coalition, the American Federation of State,
County and Municipal Employees, the American Association of Retired
Persons, and the Consumers Coalition for Health Privacy, among scores
of others.
Further, 21 State attorneys general stated that the medical records
provisions would permit ``widespread use and disclosure of sensitive
information without the individual's knowledge or consent, while
providing only limited remedies for violations and no apparent
limitations on re-disclosure.'' Editorial boards at newspapers
including the Los Angeles Times, The Washington Post, The Chicago
Tribune, and USA Today also opposed H.R. 10's medical records language.
I am pleased that S. 900 does not contain the anti-privacy medical
records language that was in H.R. 10. However, while the omission of
this provision prevents damage to peoples' privacy rights, there
remains a need to address the lack of comprehensive privacy protection
for Americans' health records.
The medical privacy regulations proposed by the Administration last
week mark a step forward in establishing meaningful Federal medical
privacy protections. The regulations, however, are limited by statutory
constraints. Congress can and must act to build on the foundation
established by the proposed regulations to ensure comprehensive medical
privacy protection. I will continue to work to achieve that goal.
Mr. SANDLIN. Madam Speaker, today marks a historical day in the world
of financial services. Passage of the S. 900/H.R. 10 conference report
will allow consumers to benefit from improvements in the financial
services system while protecting their privacy with unprecedented,
extensive safeguards. I supported H.R. 10 when it passed the House in
July, and I strongly support the conference report today.
This conference report is good news for consumers. It would expand
the Community Reinvestment Act and ensure that new, expanded
institutions are held to the high standard of CRA. In addition, it
would protect consumer privacy as never before.
The Financial services conference report is supported by big and
small banks alike as well as by the securities and insurance industries
because it would overhaul depression-era law that only increase costs
for consumers, inhibit competition, and stifle innovation. This bill
will ensure that consumers can reap the benefits of the changing
financial services marketplace.
Perhaps the most significant victory for consumers contained in this
legislation is an unprecedented level of privacy protections. When this
conference report is passed, these provisions will represent the most
comprehensive federal privacy protections ever enacted by Congress.
Moreover, this bill allows preemption of state laws in the event their
privacy protections are even stronger.
Without its passage, banks will continue to expand their operations
without statutory privacy protections and without enhanced community
reinvestment provisions. A vote for this bill is vote for consumer
privacy and community development alike. The benefits to consumers and
to the American economy will be enormous, and I urge my colleagues to
pass this landmark legislation.
Mr. KANJORSKI. Madam Speaker, I rise to support and speak about the
financial services modernization conference report pending before us.
In general, because the financial services industry is undergoing
sweeping changes--driven in part by domestic market forces,
international competition, regulatory judgments, and technological
advances--we need to update our federal laws. The compromise
legislation that we are considering represents a reasoned, middle
ground that strikes an appropriate balance by treating all segments of
the financial services industry--banking, securities, and insurance--
fairly and equitably. Among other things, this bill should increase
competition, promote innovation, lower consumer costs, and allow the
United States to maintain its world leadership in the financial
services industry. From my perspective, this legislation also benefits
consumers and protects them pragmatically, although not perfectly.
The bill that we are voting on today contains a number of important
elements that should be enacted into law.

First, the legislation takes prudent steps to prevent the
indiscriminate mixing of banking and commerce. As a result,
we will prevent the development of the cozy relationships
between financial firms and commercial companies that helped
lead to the disruption of the Japanese banking system earlier
this decade.
Additionally, the legislation preserves the viability of
the national bank charter and the role of the Treasury
Department in regulating our financial system.
The bill further establishes functional lines of financial
regulation. As a result, regulators who know the financial
activities best will oversee them.
Consumers will also receive new protections for their
financial privacy as a result of this bill. For the first
time, all financial institutions will have an ``affirmative
and continuing obligation'' to respect the privacy of their
customers, and the security and confidentiality of their
personal information. Additionally, when a customer first
opens an account--and at least annually thereafter--financial
institutions must clearly and conspicuously disclose their
privacy policies and practices.
The bill additionally protects and improves our community
development laws. The legislation specifically states that
``[n]othing in this Act shall be construed to repeal any
provision of the Community Reinvestment Act of 1977.''
Moreover, as a result of this soon-to-be law, banks will only
be able to enter into new activities or merge if they are
well capitalized, well managed, and in compliance with CRA.
Finally, the legislation includes a number of other
important consumer protections such as prohibitions against
coercive sales practices, and mandatory disclosures abut the
potential risks and the uninsured status of investment
products and insurance policies. Banks must also make full
disclosures of ATM fees.

Each of these changes to current law is important, and
Congress should pass this legislation to enact them.

federal home loan bank system reform

During the deliberations over this legislation, I also sought to
ensure that every community shared in the rewards of financial
modernization. As a result, this bill helps to guarantee that community
banks will not be crowded out of the financial marketplace of tomorrow.
The report before us grants community banks the same powers and rights
that larger financial institutions have accumulated through regulatory
orders, and allows them to organize in a manner that best fits an
institution's business plans. Additionally, I assiduously worked to
ensure that this legislation would not place small financial
institutions at a competitive disadvantage.
Another way that the bill helps small banks to compete and small
communities to thrive is found in Title VI. I am especially pleased
that this compromise agreement makes significant strides in updating
the Federal Home Loan Bank (FHL.Bank) system. The bill ensures a
vibrant system able to meet the challenges of the next century with
modern rules and state-of-the-art financial products. America's
homebuyers, small business owners, small farmers, and small communities
will benefit from a reinvigorated FHL.Bank system.
Specifically, the legislation establishes voluntary membership on
equal terms and conditions for all eligible institutions. The bill also
expands access to FHL.Bank advances for community financial
institutions, which are banks and thrifts with less than $500 million
in assets. The changes in allowable collateral for FHL.Bank advances
for community financial institutions pave the way for enhanced targeted
economic development lending.
There was much need for this reform. Even though Congress authorized
economic development lending in 1989 and the Federal Housing Finance
Board (Finance Board) wrote permissive rules to encourage it, the
system's collateral laws severely restricted such effects. It was as if
we were simultaneously saying, ``go make these loans, but they are
illegal to use as collateral.'' Now, as a result of this bill, a
framework is in place for community financial institutions to offer
safe, sound, and fully collateralized economic development loans. I

[[Page H11545]]

expect the FHL.Ba<divide>nks and the Finance Board to prioritize the
system's economic development efforts.
Additionally, the legislation creates a flexible capital structure
that is based on the actual risk of the system and not on antiquated
subscription capital rules. This new, more permanent, capital system
features two classes of stock, a revised leverage ratio, and the
parameters for establishing a risk-based capital standard. In short,
these changes--which come as a result of a true bipartisan effort--
reflect the House-passed product, which called for the creation of a
modern capital system as opposed to another study of capital plans by
the General Accounting Office.
The modernization of the capital structure will be important as the
FHLBank system fosters increased competition among lenders and assists
well-capitalized community banks in obtaining stable and attractive
sources of funding. These increases in liquidity will also translate
into increased support for community and economic development lending
within America's rural and urban neighborhoods. Additionally, the
capital modifications will alleviate some of the pressure to arbitrage
excess capital to earn competitive returns for member institutions.
The bill additionally modifies the formula used to allocate the $300
million per year in the Resolution Funding Corporation (REFCorp)
obligations of the FHLBank system. In crafting the legislation, we
sought to find a fair and equitable way to allocate the obligation,
without increasing or decreasing the FHLBanks' overall contribution to
resolving the savings and loan crisis. While switching to a flat
percentage of net income is an improvement, the 20 percent figure
ultimately adopted by the conference is not budget neutral and will
significantly increase the FHLBanks' annual payments. For example,
under current estimates, next year the FHLBanks will pay 33 percent
more toward their REFCorp obligation than in 1999. This was not the
intended purpose of the change. The intended purpose was to promote
stability for the FHLBanks.
Title VI also addresses governance issues. The bill delegates to the
FHLBanks a number of day-to-day management issues such as setting
dividends, establishing requirements for advances, and determining
employee compensation. As the FHLBank system modernizes, these prudent
measures will allow the Finance Board to focus its attention more
intensely on safety and soundness concerns. More regional control is
still proper and should be sought for the FHLBanks regarding various
management decisions, such as determining a director's compensation.
The conference committee also went too far in decentralizing some
governance functions. For example, the legislation now allows for the
direct election of the Chair and Vice Chair by each FHLBank's Board of
Directors. The continued appointment of the Chair and Vice Chair by the
Finance Board would help to ensure that the government-sponsored
enterprise focuses on its public mission.
Although I would have preferred that the legislation include an
Economic Development Program (EDP) for FHLBanks, the conference
ultimately decided not to include one at this time. An EDP, modeled
after the highly successful Affordable Housing Program, has merit and
could finally allow the FHLBanks to do for economic development lending
as they did for housing finance. I will therefore continue to pursue
the issue of creating an EDP for the FHLBanks after we pass this bill
into law today.
In sum, the Federal Home Loan Bank System Modernization Act of 1999
contained in the bill takes some important and positive steps in
modernizing the laws and rules governing the FHLBanks. There remains,
however, a need for some additional refinements, and I will work
diligently with other Members of Congress to enact them into law in the
future.

long-term concerns

A sweeping, industry-wide regulatory reform bill like this one rarely
comes along. Just as was the case after we enacted the
Telecommunications Act of 1996, unintended consequences will occur.
Among my concerns are the consequences of an ever-evolving global
financial system, the effects of the bill on market concentration, and
the insufficiency of privacy protections.
Our financial services marketplaces are increasingly global. If
managed effectively, Americans ought to benefit from the new
competitive companies created by this legislation by receiving more and
better goods and services at a lower cost. Although this legislation
promotes competition in our domestic markets, it does little to respond
to the potential dangers resulting from economic globalization. Jeffrey
Garten, a former Clinton Administration Under Secretary of Commerce for
Internal Trade, recently published an opinion piece in the New York
Times on this point. In it he ponders how a sovereign nation responds
effectively to problems when politics are national and business is
global. Now that we have passed this bill, Congress needs to spend more
time strengthening the ability of the worldwide financial system.

A wave of acquisitions and mergers in the financial services industry
will also result from this bill. Consequently, I am worried about the
concentration of wealth and power in the hands of a few powerful
individuals and companies. Moreover, such concentrations could result
in new risks. In a recent speech, Federal Reserve Board Chairman Alan
Greenspan said that megabanks are becoming ``complex entities that
create the potential for unusually large systemic risks in the national
and international economy should they fail.'' In short, we need to
attentively watch our changing financial marketplace in order to
protect consumers from potential abuses of corporate power and guard
taxpayers against another bailout like the savings and loan crisis of
the 1980s.
Finally, although this bill contains the strongest federal privacy
protections ever enacted into law, I have reservations. The passage of
this legislation does not diminish the need for Congress to develop and
enact comprehensive legislation in this area in the future. Dramatic
transformations in the financial services industry suggest that the
flow of information is no longer limited to notes penned on an
application, paper compiled in a folder, or comments entered into a
passbook. The rise of computerized financial networks allows
corporations to amass detailed information in electronic files and
share these data with others. While such databases may help businesses
to better serve their customers, they can also result in a loss of
confidentiality. Even though the conference agreement contains new
federal rules allowing consumers to op-out of sharing their information
with third parties, we must take further action once we understand this
electronic revolution more completely.
Although we may be completing our work today, it is important for us
to remain vigilant in each of these areas. I, for one, plan to continue
to closely monitor and carefully examine each of these issues.

closing

Madam Speaker, in closing, I wish to thank Chairman Leach and Ranking
Member LaFalce for their strong leadership and bipartisan efforts to
shepherd this complex bill through the legislative process. I also want
to thank my colleague Richard Baker, who serves as the Chairman of the
Subcommittee on Capital Markets, Securities, and Government Sponsored
Enterprises on which I am the Ranking member. Congressman Baker and I
have worked for more than five years to enact legislation to modernize
the Federal Home Loan Bank system, and I am grateful for his advice and
counsel in achieving this goal. Our success in seeing this issue
through demonstrates the positive results one can achieve when
Democrats and Republicans put politics aside and work cooperatively to
achieve a public policy goal.
This conference report is the culmination of more than 20 years of
work on the part of Congress, several Administrations, and federal
financial regulators to create a more rational and balanced structure
to sustain our nation's financial services sector. While I may have
concerns about market concentration, globalization, and privacy,
overall this is a good package that effectively modernizes our domestic
financial system, while ensuring strong protections for consumers and
communities. I support this bill.
Mr. CAPUANO. Madam Speaker, I rise in opposition to the conference
report for S. 900, the Gramm-Leach-Bliley Financial Services
Modernization Act. While I do believe that our financial regulatory
structure needs to be adapted to respond to the rapidly changing global
marketplace, we should not abandon several core principles.
Unfortunately, I believe this bill falls short in several important
areas.
In particular, the bill fails to adequately modernize the Community
Reinvestment Act to keep up with the changing financial landscape. The
bill does make the CRA a condition of new affiliations, and requires a
satisfactory or better CRA rating for banks that are offering new
financial products. However, the bill does not subject insurance
companies, investment firms, or other financial services companies that
take deposits and make loans subject to the CRA. This will greatly
lessen the impact of CRA as more and more individuals do their

[[Page H11546]]

``banking'' through financial services conglomerates.
The bill also includes an onerous CRA ``Sunshine'' provisions that
will subject community groups to burdensome new regulations. I agree
that there should be accountability on CRA agreements. Unfortunately,
the bill mandates substantial reporting requirements for community
groups and penalties for non-compliance, but offers the regulators no
authority to enforce the CRA agreement itself. We should be punishing
the bad actors, but most community groups are doing their best to
provide much-needed resources to low- and moderate-income communities
throughout the country. They deserve our continued support.
There has been considerable discussion regarding this legislation's
impact on the personal privacy of Americans. I believe that we have a
fundamental right to privacy of our personal financial information.
While the bill does take some small steps to protect that right,
financial services companies will still be able to share this
information between affiliates. At the very least, Americans, should be
given the opportunity of ``opting out'' of having their personal
information shared between financial services firms. Not all customers
will exercise that right. However for those who believe their
information should not be shared under any circumstances, this simple
choice should be available.
The bill also does not include an important amendment that we passed
in the House Banking Committee. This amendment, sponsored by my
colleague from California, Congresswoman Lee, would have prohibited
insurance firms that were in violation of the Fair Housing Act from
affiliating with other financial services companies. This simple
amendment would require that these firms abide by the laws of this
nation before they were allowed to expand. Unfortunately, this
provision was removed without a vote before the bill came to the floor
of the House.
This legislation makes sweeping changes to the way financial services
are delivered and regulated in this country. I will continue to work
for these simple protections for consumers and our communities, and I
urge my colleagues to vote against this measure until these concerns
are addressed.
Ms. ESHOO. Madam Speaker, I plan to vote for the Financial Service
Modernization Act Conference Report because I think there are some very
important things for the American people. The new financial structure
that the bill creates will provide consumers greater choice and
efficiency. However, I also wish to state my deep concerns with the
privacy provisions in the bill.
Every American cherishes their personal privacy. Whether in our
homes, shopping with our credit cards, or surfing the web, we expect to
be able to control who has access to our private lives.
A 1978 study by the Center for Social and Legal Research found that
64 percent of Americans were ``very concerned'' about threats to their
privacy. By 1998, those concerned had risen to 88 percent. In a recent
AARP study, 78% of respondents said they believe that current federal
and state laws are not strong enough to protect their privacy from
businesses that collect information about consumers.
We had an opportunity in the Financial Services Modernization Act to
restore confidence to the American people by establishing high
standards to protect the privacy of financial records and information.
In the Commerce Committee, we unanimously adopted a provision that
would have given Americans the right to say no to the sale or transfer
of their most personal financial information.
Unfortunately, the privacy provisions in this conference Report are
very different. The bill allows banks to create huge financial
structures that include everything from insurance companies to
marketing and travel agencies, among which private customer information
can be freely shared.
Moreover, the bill allows banks to sell private information to any
entity, whether it's a part of the financial structure or not, as long
as they enter into a ``joint agreement to perform services or functions
on behalf of the bank.'' This includes marketing and the consumer does
not have the right to say no.
I'm concerned that the privacy provisions in the Financial Services
bill threaten to take us down a path where our bank managers know as
much about us as our doctors and telemarketers know as much about us as
our mortgage companies. The American consumer should have the right to
opt out of their private financial information being sold or
transferred to outside third parties and affiliates without their
knowledge or permission. Thus, I urge the banks and financial services
industry to go beyond what is required of them in this legislation and
to enact policies that will provide comprehensive and meaningful
protection of their customers' private records.
Mr. ACKERMAN. Madam Speaker, I rise today in support of S. 900, the
Financial Services Modernization Bill. This is indeed a momentous day
as we prepare to pass this historic legislation.
S. 900 achieves many goals in financial modernization to better serve
consumers and businesses. The measure creates one-step shopping for
bank accounts, insurance policies and securities transactions, requires
banks to disclose bank surcharges on ATM machines and on the screens of
ATM machines before a transaction is made, and ensures that banks lend
to all segments of their communities with the continued applicability
of the Community Reinvestment Act.
I was particularly proud to be a conferee on the financial privacy
section of this bill. After months of negotiations, we have crafted,
what I believe, is a strong provision which will enhance the privacy
that consumers want and deserve. Four provisions in particular evidence
the achievements in the bill.
The first provision addresses disclosure requirements. Currently,
financial institutions do not have to disclose their financial privacy
provisions to their customers. Consumers have a right to know what the
policy is, and S. 900 will require these institutions to inform all new
customers of their policy and to update existing customers at least
once a year.
Second, the bill allows in most instances for consumers to ``opt-
out'' of their financial institution's information sharing agreements
with unaffiliated third parties. This arrangement strikes a balance
between protecting consumer privacy and facilitating regular financial
activities.
Third, the measure expressly prohibits financial institutions
including banks, savings and loans, credit unions, securities firms and
insurance companies, from disclosing a customer's bank account or
credit card numbers to unaffiliated third parties for telemarketing,
direct mail marketing or electronic mail purposes.
And finally, this legislation bans, with minor safety exceptions, the
despicable practice known as pretext calling. This blatantly criminal
activity in which an individual impersonates another in order to trick
an institution into providing confidential information, would be
punishable by both imprisonment and fines.
I applaud the hard work and dedication of the Conferees from the
House and the Senate, as well as the Department of the Treasury, the
Federal Reserve and the White House. Without this cooperation, we would
not be here today voting on S. 900. I encourage my colleagues to join
with me and vote for the Financial Services Modernization bill, S. 900.
Mr. BEREUTER. Madam Speaker, this Member rises today to express his
enthusiastic support for the S. 900 Conference Report, which he signed
as a conferee. Today marks the near-end of the two decade journey
toward financial modernization.
At the outset, this Member would like to thank and commend the
distinguished chairman of the Banking Committee and the Chairman of the
S. 900 Conference Committee for Iowa [Mr. Leach], for his successful,
consensus-building leadership role in guiding financial modernization
through a maze of complexities to the consideration of the S. 900
Conference Report today. In addition, the ranking member from New York
[Mr. LaFalce] also deserves to be commended for his role in the S. 900
Conference Report. Moreover, the leadership of the House Commerce
Committee and also the Senate Banking Committee should be applauded for
their collective role in the joint effort of financial modernization.
While there are many reasons to support the S. 900 Conference Report,
this Member will enumerate eight reasons. First, this measure
illustrates that a Federal statutory change in financial law is
imperative. Second, the S. 900 Conference Report has provisions which
will be of greater importance to rural, community banks, which there
are many in this Member's congressional district. Third, this measure
will allow financial companies, to offer a diverse number of financial
products to their customers. Fourth, this conference report will have a
distinct, positive effect on consumers. Fifth, this legislation will
provide the first, Federal consumer financial privacy legislation.
Sixth, this legislation allows for no mixing of banking and commerce
through a commercial basket. Seventh, this measure balances the
interest of a state in regulating insurance with that of an ability of
a national bank to sell insurance. Finally, the S. 900 Conference
Report is necessary to keep the United States in its preeminent
position in the world, financial marketplace.
1. First, a Federal statutory change in financial law is imperative
because Congress must call a halt to the recent trend of financial
modernization through regulatory fiat and judicial consent, instead we
need to modernize the nation's banking laws through statute.
As a matter of fact, on the first day of Banking Committee
consideration of financial modernization legislation in 1998, during
the 105th Congress, this Member stated: ``Once more, we start an effort
to modernize our financial institutions structure. It is an effort we
have tried before and must begin someplace. It should

[[Page H11547]]

begin in the House, and so I commend you, Chairman Leach, for launching
this effort. We need to do this. We need to face up to our
responsibilities as a legislative body. There is no doubt about that.''
2. This Member supports the S. 900 Conference Report as it will
provide great benefits to rural, community banks. Three particular
provisions demonstrate this.
A. The unitary thrift charter is of significant concern to Nebraska
community banks. One of the reasons this Member is unequivocally
opposed to the existence of this unitary thrift charter is because of
its mixing of thrift activities with commercial ventures. However, this
is not he sole reason--it also results in an extremely powerful variety
of financial institutions. Fortunately, the conference report closes
the unitary thrift loophole. It allows no new unitary thrifts to be
chartered as well as allowing those in existence to not be sold to
commercial firms.
B. Community banks will benefit from the Federal Home Loan Bank
(FHLB) charter being expanded to allow community banks to borrow from
the FHLB for family farm and small business lending. For the first
time, in rural areas such as in Nebraska, it will give community banks
access to the FHLB. In light of the agriculture situation today, this
increased community bank liquidity will have beneficial implications on
in particular the family farm.

C. The S. 900 Conference Report provides some regulatory relief for
banks under $250 million in assets. Those banks with an ``outstanding''
Community Reinvestment Act rating will be examined for compliance only
every five years and those banks with a ``satisfactory'' rating will be
reviewed every four years.
3. The S. 900 Conference Report will allow financial companies to
offer a diverse number of financial services to the consumer. This bill
removes the legislative barriers within the Glass-Steagall Act of 1933
and the 1956 Bank Holding Company Act. As a result, the conference
report will allow financial companies to offer a broad spectrum of
financial services to their customers, including banking, insurance,
securities, and other financial products through either a financial
holding company or through an operating subsidiary. Banks, securities
firms, and insurance companies will be able to affiliate with one
another through this financial holding company model.
In order for banks to be able to engage in the new financial
activities, the banks affiliated under the holding company or through
an operating subsidiary have to be well-capitalized, well-managed, and
have at least a ``satisfactory'' Community Reinvestment Act rating.
4. Fourth, this Member supports the S. 900 Conference Report because
it is very pro-consumer. It will increase choices for the consumer in
the financial services marketplace by creating an environment of
greater competition. As a result, financial modernization will allow
consumers to be able to choose from a variety of services from the
same, convenient, financial institution. Financial modernization will
give consumers more options.
Whether it be in rural Nebraska, or in New York City, consumers of
financial products all across the United States deserve additional
competitive options. Moreover, under the current setting, many rural
communities are under-served in regards to their access to a broad
array of financial services. Financial modernization will help ensure
that the financial sector keeps pace with the ever-changing, needs and
desires of the all-important consumer.
In addition, the Conference Report will also allow financial
institutions to provide more affordable services to the consumer.
Financial modernization will result in additional competition and in
efficiency which in turn should result in lower prices for financial
services to the consumer.
5. Fifth, this Member supports the S. 900 Conference Report as it
provides the first, Federal consumer privacy legislation for American
financial institutions. These privacy provisions are a pioneering,
landmark advance forward by Congress in ensuring that consumer's
personal information is protected from unwanted disclosures by
financial institutions. The privacy provisions in the conference report
include the following:
A. Prohibiting financial institutions--including banks, savings and
loans, credit unions, securities firms and insurance companies--from
disclosing customer account numbers or access codes to third parties
for telemarketing or other direct marketing purposes;
B. Requiring all financial institutions to disclose annually to all
customers its privacy policies and procedures;
C. Enabling customers of financial institutions, for the first time,
the ability to ``opt-out'' of having their personal financial
information from being shared with third parties;
D. Making it a Federal crime, punishable by up to five years in
prison, to obtain or attempt to obtain private customer financial
information through fraudulent or deceptive means; and

E. Allowing states to adopt greater privacy protections than is in
Federal law.
6. Sixth, this Member has been a fervent advocate of keeping banking
and commerce separate. In fact, this Member is quite pleased that the
S. 900 Conference Report does not contain a ``commercial market
basket'' which would have allowed the mix of commerce and banking--
equity positions by commercial banks.
An amendment was initially filed, but not offered, in the House
Banking Committee in the 106th Congress which would have allowed for
the mixing of banking and commerce in a five percent market basket.
However, this Member believes in large part because of expressed strong
opposition, including vocal and effective opposition of this Member,
this amendment was withdrawn for consideration in the Committee.
7. Seventh, this Member supports the S. 900 Conference Report
because, it balances the interest of a state in regulating insurance
with that of the interests of a national bank to sell insurance. At the
outset, this Member notes that he has a distinguished record of
supporting states rights, especially in the area of insurance
regulation.
It is important to note that this conference report preserves state
rights by providing that the state insurance regulator is the
appropriate functional regulator of insurance sales. Whether insurance
is sold by an independent agent or through a national bank, the state,
and only the state, is the functional regulator of insurance in both
instances. Moreover, this conference report also does not unduly burden
the ability of national banks to be able to sell insurance.
8. Lastly, this Member supports the S. 900 Conference Report as its
passage is necessary to keep the United States in its preeminent
position in the world financial marketplace. U.S. financial
institutions are among the most competitive providers of financial
products in the world. However, the financial marketplace is currently
undergoing three changes which are altering the financial landscape of
the world.
The first of those changes involves a technological revolution
including the internet through electronic banking. Technology is
blurring the distinction between financial products. The other two
changes include innovations in capital markets, and the globalization
of the financial services industry.
This Member would like to note Section 502(e)(1)(C) of the S. 900
Conference Report. It is this Member's understanding that credit
enhancement done through the underwriting and reinsurance of mortgage
guaranty insurance after a loan has been closed are secondary market
transactions included within the exemption in Section 502(e)(1)(C) of
the S. 900 Conference Report.
Financial modernization is the proper, appropriate step in this ever-
changing financial marketplace. Consequently, in order to maintain
America's financial institution's competitive and innovative position
abroad, the S. 900 Conference Report needs to be enacted into law. In
the absence of this bill, the American banking system could suffer
irreparable harm in the world market as we will allow our foreign
competitors to overtake U.S. financial institutions in terms of
innovative products and services. We must simply not allow this to
happen.
Therefore, for all these reasons, and many more that have been
addressed today by this Member's colleagues, we must, and will, pass
the S. 900 Conference Report. This Member urges his colleagues to
support the S. 900 Conference Report, the Financial Modernization bill.
Mr. GILLMOR. Madam Speaker, this bill makes the most important
changes in the structure of financial institutions and services in over
six decades. The financial combinations authorized by this bill can
result in substantial savings in the delivery of financial services.
However, as institutions are combined, and as they become larger, it is
essential that there be safeguards for safety and soundness to protect
both consumers and taxpayers. The bill for the most part contains those
safeguards.
While there was much discussion about each industry group wanting a
level playing field tilted in their favor, the federal and state
regulators also had their share of turf battles over regulatory
authority. In fact, it was not until Treasury and the Fed finally
reached a compromise on the operating subsidiary--affiliate issue that
this bill was able to move through the conference committee. It was
just this kind of authority grabbing by regulators that required a
provision to prevent the federal regulators from over regulating and
intruding into financial services functions in which they have no
expertise.
While the Federal Reserve serves an umbrella regulator over Financial
Holding Companies, I was concerned about the Fed getting into the
jurisdiction of the already effective insurance and securities
regulators. Consumers do not derive any benefit from additional layers
of regulation that can only intrude into the marketplace.

[[Page H11548]]

My amendment in the Commerce Committee two years ago, which was
included in the current bill, created the functional regulatory
framework for financial holding companies. The purpose of this ``Fed
Lite'' framework is to parallel the financial services affiliate
structure envisioned under this legislation. This parallel regulatory
structure eliminates the duplicative and burdensome regulations on
businesses not engaged in banking activities, and importantly,
preserves the role of the Federal Reserve as the prudential supervisor
over businesses that have access to taxpayer guarantees and the federal
safety net.
The Information Revolution, like the Industrial Revolution, has made
information much more widely available at a lower cost and in less
time. Technology and innovation have altered and expanded the processes
by which we use financial products and services.
But the increase in the availability and transmission of information
has not altered the need for consumers to transact with financial
institutions to take care of their financial requirements. People will
need banking, insurance and securities options. But they want these
options in greater speed and convenience. Customers expect a financial
relationship with their financial service provider that will benefit
them with enhanced benefits and lower costs.
There is legitimate concern about the misuse of information. The
tremendous human benefits that have come from these advances also carry
with them unprecedented new threats to personal privacy. Personal
privacy needs reasonable protections, because personal privacy is an
important part of individual freedom. This bill for the first time put
in place strong privacy provisions for the financial services industry.
With enactment of this legislation, consumers can go to a financial
services provider that is able to complete globally, is subjected to
streamlined regulation and must prevention your financial information
from falling into the hands of unaffiliated organizations and
telemarketers if you instruct it to do so. I urge the adoption of the
conference report.
Mr. TOWNS. Madam Speaker, I rise today in strong support of the
conference report on the Gramm-Leach-Bliley Financial Modernization Act
of 1999. For the first time in more than two decades, Congress, the
Administration, financial regulators, and all sectors of the financial
services industry have reached a consensus on legislation to modernize
the financial marketplace. For far too long, our nation's financial
services firms have labored under outdated banking laws that have
impaired their global competitiveness, limited the range of services
that consumers can obtain from one financial institution, and driven up
costs.
With the passage of this conference report, consumers and investors
will be able to choose from a wider array of products and services
offered in a more competitive marketplace. Securities firms, insurance
companies, and banks will be able to freely affiliate with each other
through a holding company. Each subsidiary financial institution within
the holding company will be functionally regulated, thereby ensuring
tough, consistent investor protections and fair competition.
Consumers--who will save an estimated $15 billion over three years--
will be the beneficiaries of one-stop shopping to meet a broad range of
financial needs, from checking and savings accounts to mortgages and
financial planning. The increased competition will also give
underserved communities, entrepreneurs, and small business owners
expanded access to a full range of financial services.
Equally important, the conference report incorporates an historic
agreement maintaining the obligation of insured financial institutions
to meet the requirements of the Community Reinvestment Act to serve the
credit needs of low- and moderate-income residents of their community.
It also provides consumers with the most extensive safeguards yet
enacted to protect the privacy of their financial information.
Passage of this legislation is vital to maintaining the preeminent
status of the U.S. financial services industry in the global economy.
Banks, securities firms, and insurance companies will now be able to
compete with overseas financial juggernauts that have not been
constrained by U.S. regulation. And New York, as the world's leading
financial center, is well positioned to compete in the arena for global
business as foreign banks and securities firms seek to establish or
expand their U.S. operations.
With its concentration of financial services organizations, New
York's economy stands to benefit tremendously from passage of this
legislation. A vigorous, healthy, competitive financial services sector
means more jobs, higher real earnings growth, and more tax revenues.
Indeed, the finance sector accounted for half of the $2.7 billion
growth in personal income, general corporation, and unincorporated
business taxes between 1992 and 1998.
Madam Speaker, the Gramm-Leach-Bliley Financial Modernization Act of
1999 is a great step forward in improving our nation's financial
services system for the benefit of investors, consumers, community
groups, financial services providers, and our nation's economy. I
strongly support passage of the conference report on S. 900.
Mr. SHAYS. Madam Speaker, I rise in strong support of the conference
report for the Financial Services Act. This bill is a wonderful
testament to the important things we can accomplish when we set aside
partisan differences and work together on the nation's business.
The historic bill, which has been 20 years in the making, has the
support of a majority of Congressional Republicans and Democrats, as
well as the Administration.
S. 900 replaces outdated, Depression-era laws that separate banking
from other financial services with a new system to enhance competition
and increase consumer choice. The bill repeals the anti-affiliation
provisions of the 1933 Glass-Steagall Act, as well as the 1956 Bank
Holding Company Act. In doing so, financial companies--either through a
financial holding company or through operating subsidiaries--will be
allowed to offer a broad array of financial products to their
customers, including banking, insurance and securities.
To be permitted to engage in the new financial activities authorized
under the bill, banks affiliated under a holding company would have to
be well-managed, well-capitalized, and have a satisfactory Community
Reinvestment Act rating, thus ensuring that banks continue to lend to
inner-city and minority communities.
Encouraging greater competition will lower prices for financial
services and improve products, benefiting consumers and the economy.
It's true that some may benefit from these changes more than others.
But fostering competition between financial institutions will
ultimately ensure consumers have greater choices at lower cost.
Madam Speaker, the simple fact is, these banking reforms are long
overdue. The anti-affiliation provisions of the Glass-Steagall Act are
sorely outdated and have increasingly impeded the United States'
ability to compete in the new world economy.
To illustrate the changes in the financial services sector, consider
the following fact. In 1933, when the Glass-Steagall Act was signed
into law, upwards of 60 percent of the nation's assets were deposited
in banks and thrifts. Today, banks and thrifts control 37 percent of
the nation's assets.
In recognition of this changing climate, we have seen the prohibition
on the mixing of banking and securities substantially reduced by
sympathetic regulators, favorable court decisions, and large mergers.
And today, we have come together to consider this landmark bill.
I want to thank Chairman Jim Leach of the Banking and Financial
Services Committee and Chairman Tom Bliley of the Commerce Committee
for shepherding S. 900 through its final, difficult stages and urge the
adoption of this conference report.
Ms. ROYBAL-ALLARD. Madam Speaker, I rise in opposition to S. 900, the
Financial Services Modernization Conference Report.
I would be happy to support a financial modernization bill that
improves choice, access and affordability for all Americans.
Unfortunately S. 900 fails on all accounts. While I understand the need
to update our antiquated banking laws and bring our country's financial
system into the 21st century, I am unwilling to do this at the expense
of our consumers. It is unacceptable that we give the green light for
the unprecedented conglomeration of banks, securities firms, and
insurance companies while we ignore the most modest provisions to
protect our consumers.
Earlier this year, I joined many of my colleagues in opposing the
House's financial modernization bill, H.R. 10. I opposed the bill
because it failed to protect consumers in regards to community
reinvestment and privacy. Unfortunately, this conference report is no
improvement.
First, S. 900 fails to adequately protect the Community Reinvestment
Act (CRA), which has been instrumental in leveraging billions of
dollars of investment into communities such as mine, where unemployment
and poverty levels are still well above the national average.
Specifically, S. 900 fails to require that banks maintain a
``satisfactory'' CRA rating after they have expanded across industry
lines to take advantage of the newly authorized activities under this
bill. Moreover, S. 900 reduces the frequency of CRA examinations for
small banks. Lastly, S. 900, under the guise of ``sunshine
disclosures'', targets community groups with onerous and burdensome
reporting requirements in their community agreements with banks. Rather
than promoting greater accountability, this sunshine provision will
have a chilling effect on these community agreements, which have been
so effective in opening up access to credit in low income and minority
communities.
Second, S. 900 fails to provide strong financial and medical privacy
protections. If we're

[[Page H11549]]

going to allow for the creation of mega one-stop centers with access to
information about millions of customers, consumers should have the
right to say ``no'' to the distribution of their personal information
to third parties and affiliates. Instead of giving consumers control
over the use of their confidential customer information, the bill
allows banks to share or sell it.
As I previously stated when I voted against the financial
modernization bill earlier this year, I am not willing to trade the so-
called perks of financial modernization--efficiency, choice,
convenience, one-stop-shopping--for the decimation of privacy rights
and community reinvestment. S. 900 leaves our consumers even worse off
than before.
I urge my colleagues to oppose this bill.
Mr. DOOLITTLE. Madam Speaker, I support the passage of the S. 900
conference report because I believe it is a fair and balanced bill
which will spur competition within the financial services industry,
reinforce functional regulation and protect consumers.
This legislation is by no means perfect, but it does represent a
reasonable compromise between the House and Senate versions of
financial services modernization legislation. The issue of modernizing
this country's financial laws has been debated in Congress for over two
decades and has not come to a resolution until now. The financial
services industry has undergone dramatic changes in the past few
decades and regulations have been formulated in a piecemeal fashion
through regulatory decisions and court rulings. This has resulted in an
uneven and often inequitable regulatory framework that is badly in need
of an overhaul in today's rapidly changing economy.
It is long past time to modernize our financial system in order to
reflect the reality of the marketplace. In doing so we need to make
sure there are rules in place to protect the American public without
layering bureaucratic regulations. I believe the bill before us
accomplishes this goal. The point of passing financial services reform
is to update and streamline the rules and ensure that all entities are
fairly and consistently regulated by the appropriate entity. I believe
S. 900 strikes a balance between fostering free market competition and
protecting the interests of the general public.
As a strong supporter of the Community Reinvestment Act (CRA), I
believe this Conference Report is a significant improvement over the
Senate-passed bill, which contained onerous provisions that I believe
would have seriously undermined CRA. This bill not only steadfastly
maintains the application of CRA to all insured depository
institutions, but also requires that these banks have at least a
``satisfactory'' CRA rating they can offer any new financial services.
Without the passage of this bill, banks will continue to expand into
new areas of financial services, as they are already doing, without
clear CRA requirements.
S. 900 also contains a small but very important provision that I have
personally worked on for the past three years. The language I have
included will prevent certain financial institutions from
discriminating against victims of domestic violence in the
underwriting, pricing, sale or renewal of any insurance product and in
the settlement of any claim. This provision specifically applies to
banks, which is important because this legislation will allow banks to
sell and underwrite insurance on a large scale for the first time. When
this is signed into law, it will be the first federal legislation of
its kind prohibiting insurance discrimination against survivors of
domestic violence.
Another important provision in this legislation is the inclusion of
the ``PRIME'' bill, a new program that will provide new grants to
microentrepreneurs. This program will help provide training and
technical assistance to low-income and disadvantaged entrepreneurs
interested in starting or expanding their own business. My home state
has been a leader in the microcredit movement and these new grants will
be a real boon to microentrepreneurs in my district and throughout
Colorado.
It is rare that a flawless bill comes to the floor of the House and
this legislation is no exception. This is a good bill, but it is not
perfect. While the goals of this legislation are too important to delay
any longer, I do believe that the privacy language should be stronger.
This bill establishes privacy laws where none currently exist and
ensures that stronger state privacy laws will not be preempted.
However, I think Congress needs to continue to explore the issues of
financial and other types of personal privacy that will become
increasingly more important to consumers as marketplaces change and
technology advances continue.
Mr. HYDE. Madam Speaker, I rise in support of S. 900, the Gramm-
Leach-Bliley Act. For many years, we have been trying to repeal the
outdated restrictions that keep banks, securities firms, and insurance
companies from getting into one another's businesses. After all the
debate, I think we have finally come up with something in this bill
that will open up a whole new world of competition.
Financial services are becoming increasingly globalized, increasingly
computerized, and increasingly seamless. Banking laws passed during the
Depression simply will not do in the 21st century. I wish that we could
maintain a world where everyone knew their banker on a first name basis
and loans were made on a handshake, and I think in the new world some
banks will provide that kind of service to those who demand it. But we
need not have laws that limit us to that kind of service, as desirable
as it may seem. Everyone is better off if the market decides what kinds
of services financial firms will offer.
Just think about the progress we have made in the past ten years.
When I was a child, only the wealthy owned stocks. Now, with the growth
of the mutual fund industry and self-directed retirement funds,
millions and millions of average Americans not only own stocks, but
make their own investment decisions. These developments create wealth,
increase people's incentive to produce, and relieve some of the
entitlement burden of government. I believe that this bill will bring
more such positive developments.
I want to say a word about my friends Jim Leach, chairman of the
Banking Committee, Tom Bliley, chairman of the Commerce Committee, and
Phil Gramm, chairman of the Senate Banking Committee. They have done an
excellent job of putting this package together. I commend them for
their work in bringing this bill to the floor in a very difficult and
contentious environment.
I especially want to commend them for working with me on the
antitrust and bankruptcy provisions of the bill. These provisions were
especially important to me as chairman of the Judiciary Committee,
which has jurisdiction over these areas of the law. Let me briefly
explain our intent with respect to these provisions.
Under current law, bank mergers are reviewed under special bank
merger statutes, and they do not go through the Hart-Scott-Rodino
merger review process that covers most other mergers. Now banks will be
able to get into other businesses which they have not been able to do
before.
The principle that we have followed is that when mergers occur, the
bank part of that merger will be judged under the current bank merger
statutes, and we do not intend any change in that process or in any of
the agencies' respective jurisdictions. The non-bank part of that
merger will be subject to the normal Hart-Scott-Rodino merger review by
either the Justice Department or the Federal Trade Commission.
This is, in all likelihood, the result that would have been obtained
anyway. Hybrid transactions involving complex corporate entities--some
parts of which are in industries subject to merger review by
specialized regulatory agencies and other parts of which are not--have
occurred in the past. In those cases, the various parts of the
consolidation were considered according to agency jurisdiction over
their respective parts, so that normal Hart-Scott-Rodino Act
requirements applied to those parts that did not fall within the
specialized agency's specific authority. See, e.g., 16 C.F.R.
Sec. 802.6. I think the precedents would have already dictated the
desired result here.
The clarification for the new financial holding company structure
contained in Sec. 133(c) is consistent with, and in no way disturbs,
those existing precedents. Even so, this is a big change we are making
in our banking laws, and I thought it would be most helpful to clarify
this point with respect to financial holding companies in the statute.
I think we have achieved that clarification with the language in
Sec. 133(c) of the Conference Report. Similar language was a part of
the House bill, and I appreciate the Senate conferees' accepting this
clarification.

As the shape of the new activities in which banks were going to be
permitted to engage through operating subsidiaries became clear in
conference, the conferees ideally would have further revised the House
language to make a similar clarification, regarding consolidations of
non-banking entities that are operating subsidiaries of merging banks.
But the operating subsidiary situations so closely parallels the
precedents I have mentioned that a clarification for that situation was
probably unnecessary.
Of course, whatever aspect of a banking merger is not subject to
normal Hart-Scott-Rodino premerger review will be subject to the
alternative procedures set forth in the Bank Merger Act and the Bank
Holding Company Act, including the automatic stay. So one way or
another, there will be some avenue for effective premerger review by
the antitrust enforcement agencies. These alternative procedures would
be in some ways more potentially disruptive to the merging banking
entities, particularly when the antitrust concern involves non-banking
entities. But it is our intent that the precedents will be followed.
In short, under this bill and the precedents, no bank is treated
differently than it otherwise would be because it has some other
business within its corporate family. Likewise, no other business is
treated differently than it otherwise would be because it has a bank
within its corporate family.

[[Page H11550]]

The conference report also includes conforming language found in
Sec. 133(a) to clarify that the Federal Trade Commission's authority in
the non-banking sphere is preserved. We though these provisions were
advisable in light of the fact that the FTC's enforcement authority
specifically excludes banks and savings associations, but does not and
should not exclude the non-banking entities that will be brought into
the banking picture as a result of the new law. We have clarified that
the existing exemption is limited to the bank or savings association
itself and that the FTC retains jurisdiction over nonbank entities
despite any corporate connections they may have with banks or savings
associations. This clarification applies to the FTC's jurisdiction over
non-banking firms under the FTC Act, and accordingly under any statute
that may provide for enforcement under the Act like the consumer credit
laws and the Telemarketing and Consumer Fraud and Abuse Prevention Act.
For example, the FTC would continue to have jurisdiction over a
telemarketer of financial services, even if it is a subsidiary or
affiliate of a bank. The FTC's authority would not be expanded or
extended to any new statute that may not be enforced under the FTC Act.
These provisions were also included in the House bill, and again, I
appreciate the Senate conferees' accepting them in the final conference
report.
Again, no bank is treated differently than it otherwise would be
because it has some other business within its corporate family.
Likewise, no other business is treated differently than it otherwise
would be because it has a bank within its corporate family.
Let me again commend my friends Jim Leach, Tom Bliley, and Phil
Gramm, and everyone else who has worked on this legislation, and I ask
my colleagues to support it.
Mr. COMBEST. Madam Speaker, S. 900, the Gramm-Leach-Bliley Act, is an
important step in revamping and modernizing America's financial system.
While there are both pluses and perils to the approach contained within
this act, today I wish to highlight several portions of the bill which
are of particular importance to the Committee on Agriculture, and which
were very much in the minds of the Managers and staff while drafting
this conference report.
S. 900 contains several provisions relating to the treatment of
certain financial instruments for various purposes under this country's
securities laws. In particular, a bank is explicitly not required to
register as a broker-dealer under the '34 Act for participating in
certain hybrid and swap transactions.
These provisions, contained in Title II of the bill, are not a
finding that all swaps are securities. Furthermore, in the case of both
swaps and hybrids, it is important to note that the classification of a
particular type of instrument for purposes of the Gramm-Leach-Bliley
Act does not preclude that instrument or transaction from falling under
the jurisdiction of the Commodity Futures Trading Commission under the
Commodity Exchange Act. This result is made clear in section 206(c) of
Title II of the bill.
Furthermore, section 210 of Title II states that ``Nothing in this
Act shall supersede, affect, or otherwise limit the scope and
applicability of the Commodity Exchange Act.'' This section recognizes
that transactions which are futures contracts or commodity options
under the exclusive jurisdiction of the CFTC pursuant to the Commodity
Exchange Act do not receive an exemption or exclusion from the
Commodity Exchange Act because of anything in the Gramm-Leach-Bliley
Act. No financial instrument described in this act, be it a swap
agreement, new hybrid product, or identified banking product, is
exempted or excluded from the jurisdiction of the CFTC solely by virtue
of anything contained in the Gramm-Leach-Bliley Act. The CFTC's
traditional exclusive authority is unaffected by this legislation.
The Privacy Title, Title V of the Gramm-Leach-Bliley Act, explicitly
excludes persons and entities subject to the jurisdiction of the CFTC,
and the Federal Agricultural Mortgage Corporation and persons and
entities chartered and operating under the Farm Credit Act of 1971,
from the provisions of this Title. The purpose of sections 509(3)(B)
and (C) and 527(4)(D), excluding the above mentioned persons and
entities from the definition of ``financial institution,'' is to make
it clear that no provision of Title V will apply to farm credit system
institutions nor to CFTC regulatees.
Mr. PACKARD. Madam Speaker, I would like to urge my colleagues to
support S. 900, the Financial Services Modernization Act Conference
Report, when it is considered on the floor today. These improvements
are long overdue for the benefit of investors, consumers, community
groups, financial service providers, and our nation's economy.
This legislation will modernize America's financial services industry
to better serve consumers--individuals, small businesses and large
corporations. It will increase convenience for financial service
consumers by creating one-step shopping for bank accounts, insurance
policies, and securities transactions. S. 900 will also greatly
increase the international competitiveness of American financial firms.
S. 900 provides meaningful consumer protection rules for disclosure
requirements and damage recovery protections and establishes consumer
grievance procedures. The bill also promotes consumer privacy by
barring financial institutions from disclosing customer account numbers
for telemarketing or other direct marketing purposes.
Madam Speaker, S. 900 will provide the most extensive safeguards yet
enacted to protect the privacy of consumer financial information. I
urge my colleagues to support this much needed, historic legislation.
Mr. MOORE. Madam Speaker, I rise today in support of S. 900, the
conference report for the Financial Services Modernization Act of 1999.
As a member of the Banking and Financial Services Committee, I
supported this measure when it passed our committee on March 23 by a
51-8 margin. I supported this measure again, when it overwhelmingly
passed the full House of Representatives on July 1, 1999, on a vote of
343-86.
I would like to commend my colleagues in both the House and Senate
who served on the conference committee. Through their hard work, we
have before us today a well balanced and thoughtful conference report
that, after over two decades of trying, finally reforms our antiquated,
Depression-era financial services laws to benefit consumers, businesses
and the economy.
I supported the House Banking version because financial modernization
is desperately needed to address changes that are currently taking
place in the global marketplace. Today, America's financial services
industry is the most effective and competitive in the world. The
banking system and other associated financial services institutions are
the oil that prime the pump to our economy. The industry's ability to
adapt to the swift and vast structural and technological changes in the
marketplace have accounted for the record bank profits and the largest
peacetime expansion since World War II.
These achievements of our financial services industry, however, are
at risk--risk to both consumers and the system itself--if we continue
to rely on ad hoc adaptations without establishing a meaningful and
prudent framework in which this system, undergoing such rapid changes,
can thrive and prosper. This conference report establishes such a
responsible framework, with an eye allowing the industry to thrive and
prosper, while providing the most progressive consumer protection
safeguards ever enacted into law.
Among the many benefits of this landmark legislation, three are
critically important:
S. 900 permits the creation of new financial holding companies, which
can offer banking, insurance, securities, and other financial products.
These new structures will allow American financial firms to take
advantage of greater operating efficiencies and spur competition. This
new competitive spirit will create better access to capital that will
continue to promote our growing economy, greater choices, innovative
services, and lower prices for consumers. Indeed, the efficiencies
created with this bill are estimated to save consumers over $15
billion.
S. 900 benefits our local communities by preserving and strengthening
community investment. This conference report requires that banks have a
good track record of community reinvestment as a condition for taking
advantage of the bill's newly authorized business activities and, for
the first time, requires that a bank's performance on community
reinvestment be considered when it expands outside of traditional
banking activities. In addition to these protections, this conference
report creates a new program designed specifically to help small, low-
income entrepreneurs start and expand their businesses in underserved
areas.
S. 900 provide important new consumer protections including mandatory
prohibitions on coercive sales practices, disclosure of ATM fees, and
for the first time, protections for Americans' financial privacy. These
new standards are a significant improvement over current law, where no
standards exist. The conference report requires financial institutions
to notify consumers and provide them with the ability to opt-out of the
disclosure of personal financial information to unaffiliated third
parties; prohibits third parties from sharing or selling a consumer's
personal financial information; provides strengthened and expanded
regulatory authority to detect and enforce privacy

[[Page H11551]]

violations; and prevents the preemption of stronger state consumer
protection laws.
Madam Speaker, this conference report represents a balanced
compromise between the House and the Senate versions of financial
services modernization. Congress has spent several decades considering
many of the complicated and extremely important issues addressed in
this compromise--a compromise that represents a landmark legislative
achievement in modernizing our nation's financial services industries.
It establishes a rational framework in which our financial services
industries may offer a wide range of services that will benefit
consumers. It creates, in most cases, prudential consumer safeguards.
And, it levels the playing field in a manner that will allow our
financial institutions to compete in the 21st Century. I congratulate
and commend my colleagues in both the House and the Senate who served
on the conference committee and urge swift passage of this report.
The SPEAKER pro tempore. All time for debate has expired.
Without objection, the previous question is ordered on this
conference report.
There was no objection.
The SPEAKER pro tempore. The question is on the conference report.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. DINGELL. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 362,
nays 57, not voting 15, as follows:

[Roll No. 570]

YEAS--362

Abercrombie
Ackerman
Aderholt
Allen
Andrews
Archer
Armey
Bachus
Baird
Baker
Baldacci
Ballenger
Barcia
Barr
Barrett (NE)
Bartlett
Bass
Bateman
Becerra
Bentsen
Berkley
Berman
Berry
Biggert
Bilbray
Bilirakis
Bishop
Blagojevich
Bliley
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Bono
Borski
Boswell
Boucher
Boyd
Brady (TX)
Brown (FL)
Brown (OH)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Canady
Cannon
Capps
Cardin
Carson
Castle
Chabot
Chambliss
Chenoweth-Hage
Clayton
Clement
Clyburn
Coble
Coburn
Collins
Combest
Cook
Cooksey
Cox
Cramer
Crane
Crowley
Cubin
Cummings
Cunningham
Danner
Davis (FL)
Davis (VA)
Deal
DeGette
Delahunt
DeLay
DeMint
Deutsch
Diaz-Balart
Dicks
Doggett
Dooley
Doolittle
Doyle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Everett
Ewing
Farr
Fletcher
Foley
Forbes
Ford
Fossella
Fowler
Franks (NJ)
Frelinghuysen
Frost
Gallegly
Ganske
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Green (TX)
Green (WI)
Greenwood
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Hastert
Hastings (WA)
Hayes
Hayworth
Herger
Hill (IN)
Hill (MT)
Hilleary
Hilliard
Hinojosa
Hobson
Hoeffel
Hoekstra
Holden
Holt
Hooley
Horn
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Istook
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Jones (OH)
Kasich
Kelly
Kennedy
Kilpatrick
Kind (WI)
King (NY)
Kingston
Kleczka
Klink
Knollenberg
Kolbe
Kuykendall
LaFalce
LaHood
Lampson
Lantos
Largent
Latham
LaTourette
Lazio
Leach
Levin
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lofgren
Lowey
Lucas (KY)
Lucas (OK)
Maloney (CT)
Maloney (NY)
Manzullo
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McCrery
McGovern
McHugh
McIntosh
McIntyre
McKeon
McNulty
Meehan
Meeks (NY)
Menendez
Metcalf
Millender-McDonald
Miller (FL)
Miller, Gary
Minge
Mink
Moakley
Moore
Moran (KS)
Moran (VA)
Morella
Murtha
Myrick
Nadler
Napolitano
Neal
Nethercutt
Northup
Nussle
Oberstar
Olver
Ortiz
Ose
Owens
Oxley
Packard
Pallone
Pascrell
Pastor
Payne
Pease
Pelosi
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pickett
Pitts
Pombo
Pomeroy
Porter
Portman
Price (NC)
Pryce (OH)
Quinn
Rahall
Ramstad
Rangel
Regula
Reyes
Reynolds
Riley
Roemer
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Rothman
Roukema
Royce
Ryan (WI)
Ryun (KS)
Sabo
Salmon
Sanchez
Sandlin
Sawyer
Saxton
Schaffer
Scott
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherman
Sherwood
Shimkus
Shows
Simpson
Sisisky
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Souder
Spence
Spratt
Stabenow
Stearns
Stenholm
Strickland
Stump
Stupak
Sununu
Sweeney
Talent
Tancredo
Tanner
Tauscher
Tauzin
Terry
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Thune
Tiahrt
Toomey
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Upton
Velazquez
Vento
Visclosky
Vitter
Walden
Walsh
Wamp
Watkins
Watt (NC)
Watts (OK)
Weiner
Weldon (FL)
Weldon (PA)
Weller
Wexler
Weygand
Whitfield
Wicker
Wilson
Wise
Wolf
Wu
Wynn
Young (AK)
Young (FL)

NAYS--57

Baldwin
Barrett (WI)
Barton
Brady (PA)
Campbell
Capuano
Clay
Condit
Conyers
Costello
Coyne
Davis (IL)
DeFazio
DeLauro
Dingell
Dixon
Edwards
Evans
Fattah
Filner
Frank (MA)
Gejdenson
Gutierrez
Hastings (FL)
Hefley
Hinchey
Inslee
Jackson (IL)
Kaptur
Kildee
Kucinich
Lee
Lewis (GA)
Lipinski
Luther
Markey
McDermott
McKinney
Meek (FL)
Mica
Miller, George
Obey
Phelps
Rivers
Rodriguez
Roybal-Allard
Rush
Sanders
Sanford
Schakowsky
Serrano
Taylor (MS)
Thurman
Tierney
Waters
Waxman
Woolsey

NOT VOTING--15

Bereuter
Dickey
Kanjorski
Larson
Martinez
McInnis
Mollohan
Ney
Norwood
Paul
Radanovich
Scarborough
Shuster
Stark
Taylor (NC)

{time} 2317

Mr. SANFORD changed his vote from ``yea'' to ``nay.''
So the conference report was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated for:
Mr. KANJORSKI. Mr. Speaker, on rollcall No. 570, the final passage of
the conference report on S. 900 the Gramm-Leach-Bliley Financial
Services Modernization Act of 1999, I was away from Washington on
official business. Had I been present, I would have voted ``yea.''
Mr. BEREUTER. Mr. Speaker, this Member was not recorded on rollcall
vote No. 570, on passage of the conference report on S. 900, the Gramm-
Leach-Bliley Act. Had he been present, he would have voted ``aye.''

____________________