Committee on Rules

June 29, 1999 (1:00 p.m.)

Amendments Submitted to H.R. 10 - Financial Services Modernization Act of 1999

(in alphabetical order)

Andrews #41 Provides an incentive to financial institutions to provide current or recent welfare recipients with access to small amounts of capital ("microloans" of $20 to $5,000) for the purpose of encouraging entrepreneurial investment. Provides that a financial institution may receive credit in its Community Reinvestment Act assessment for establishing a record of providing such microloans.

Andrews #74 Requires insurance companies that insure garment companies that sell, either retail or wholesale, or produce children's sleepwear to charge an additional surcharge to those companies whose products are not in compliance with pre-1996 standards set by the Consumer Product Safety Commission. Revenue raised by this surcharge would go into a burn victim trust fund to be administered by a way designated by the administration. LATE

Andrews #75 Requires auto insurers and their related companies to disclose their true profitability levels. LATE

Baker/Dreier #46 Allows for the use of electronic signatures and authentication devices to validate financial transactions and securities agreements.

Barrett (WI)/Gutierrez #24 Requires insurance companies to disclose information about the purchasers of, and applicants for, their insurance products.

Barrett (WI)/Gutierrez #25 Requires the Commerce Department to conduct a study to determine whether the insurance industry is serving qualified citizens of all economic circumstances, all racial, gender and ethnic groups, and in all geographic areas under fair and reasonable conditions, and whether there is a need for further data collection requirements to determine the extent to which insurance redlining is occurring.

Barrett (WI) #26 Limits liability for unauthorized use of ATM/Debit Cards at $50, the same level that applies to credit cards.

Bentsen/Royce/Inslee/Weller #50 Strikes the Federal Reserve's review of grandfathered unitary thrift holding mergers.

Bentsen/Royce/Inslee #51 Provides for Federal Deposit Insurance Corporation's review of grandfathered unitary thrift mergers.

Bentsen/Royce/Inslee #52 Provides for Federal Reserve and Office of Thrift Supervision review of grandfathered unitary thrift mergers.

Bliley #31 Protects state laws from unintentional preemption; allows current disputes between insurance and banking regulators to be heard on the merits and without unequal deference; allows mutual insurance companies to redomesticate to another state and reorganize into a mutual holding company or stock company; and amends provisions directing the federal banking regulators to issue consumer protections governing bank insurance sales, to prohibit discrimination against victims of domestic violence, preventing such status from being considered as a criterion in any insurance activity conducted by or at a bank, or by a bank representative.

Bliley #32 Provides an unambiguous power to consumers to chose to keep their financial information confidential with third parties and affiliates; restores language that prohibits insurance companies affiliated with banks from discriminating against victims of domestic violence; restores language restricting the activities of operating subsidies; and provides a mechanism consistent with state regulation of insurance for redomestication of mutual insurance companies.

Bliley #57 Allows mutual insurance companies to redomesticate to another state and reorganize into a mutual holding company or stock company. Only takes effect in states which do not have enacted laws governing such transaction. Redomestication is subject to approval by the state insurance regulator of the new domicile, who must make an affirmative determination that the reorganization plan meets a number of consumer protection requirements. Amends provisions directing the federal banking regulators to issue consumer protections governing bank insurance sales, to prohibit discrimination against victims of domestic violence, preventing such status from being considered as a criterion in any insurance activity conducted by or at a bank, or by a bank representative.

Bonilla #54 Exempts rural financial institutions with assets of less than $100,000,000 from the Community Reinvestment Act requirements.

Burr/Myrick #67 Provides that a financial holding company otherwise meeting all requirements for grandfathering of non-financial activities shall not be subject to expansion limitations with respect to federally-regulated communications companies or related communication production companies owned by an insurance holding company since January 1, 1998. LATE

Capuano #58 Requires nonbank affiliates to be in compliance with the Community Reinvestment Act of 1977 by demonstrating that they are meeting the community credit, capital, investment, insurance, and consumer needs of the communities in which they do business. Requires the appropriate Federal regulatory agency to take the CRA record of nonbank affiliates into consideration when reviewing the activities or any application of the affiliate.

Capuano #59 Limits the total number of Wholesale Financial Institutions (WFIs) that can be created under the legislation. Allows the creation of five federally-chartered WFIs under the oversight of the Office of the Comptroller of the Currency, and five state-chartered WFIs under the oversight of the Federal Reserve Board.

Castle/Maloney (CT) #55Changes the deadline for applications for unitary thrift charters from March 4, 1999 to July 1, 1999.

Condit/Markey/Towns/Waxman/Dingell #42Ensures that an individual's health information cannot be disclosed without the individual's consent or under exceptions that are far more limited than those in H.R. 10. Provides a privacy "floor" and does not preempt stronger Federal or state laws. Provides strong remedies for unauthorized disclosures.

Condit/Markey/Towns/Waxman/Dingell #43 Deletes subtitle D of title III, "Confidentiality of Health and Medical Information," to preserve protections in current Federal and state laws for confidentiality.

Cook #60 Replaces section 241, subtitle D, of title II with a provision requiring the General Accounting Office to study "the consequences of limiting through regulation commissions, fees, or other costs incurred by customers in the acquisition of financial products." Through this study, Congress could determine the potential negative effects of the regulation of commissions and fees before directing regulators to impose such rules. LATE

DeGette #56 Prohibits financial institutions that sell insurance from discriminating against a victim of domestic violence in the pricing and renewal of insurance or in the payment of insurance claims; does not preempt State law.

Dingell #37 Restores language approved by the Commerce Committee creating an exception for private placements of securities by banks. Allows smaller banks without broker-dealer affiliates to make private placements to qualified investors, while those larger banks with broker-dealer affiliates would be required to sell through those affiliates, providing investors with protections of Federal securities laws.

Foley #15 Allows foreign banks to upgrade to a branch with the approval of the appropriate chartering agency (the OCC or the State Bank Supervisor) and the Federal Reserve Board, and the chartering agency would have to be in existence for the time periods set forth in the 1994 Riegle-Neal Act and would also have to meet the requirements for consolidated home country supervisions.

Gutierrez/Barrett (WI)/Meeks/Engel/Sanders/Lee/Schakowsky/Capuano/Tubbs-Jones #14 Requires that all nonbank affiliates of bank holding companies that engage in lending or offer banking products or services shall be subject to the Community Reinvestment Act of 1977.

Hill #61 Section 305(b) of the Federal Power Act (FPA) prohibits a person from holding the position of a director or officer of a utility contemporaneously with a position as an officer or director of a bank authorized to underwrite or participate in the marketing of securities of a public utility. Persons desiring to hold such positions must apply to and may get authorization from the Federal Energy Regulatory Commission (FERC) to do so. To the extent the Glass-Steagall Act is modified (through Financial Services Reform legislation) in a manner which permits banks to engage in underwriting, hundreds of utility directors will be precluded from continuing to serve in both capacities. In the case of Investor Owned Utilities, many of their directors would be immediately affected. The amendment would allow a member of a bank board to serve on the energy board without authorization from FERC LATE

Hill/Gonzalez/Ewing/Bentsen #62 Serves as a grandfather of state authority for national banks to sell title insurance in certain states where state chartered banks are now selling title insurance. Clarifies that national banks and their subsidiaries can otherwise sell title insurance under this provision only if state legislatures either have already taken or will take explicit action to expressly authorize bank sale of title insurance. Clarifies that the first parity provision would apply if, as of date of enactment, state banks in that state were authorized to sell title insurance and were actively engaged in such activity. Provides under the second parity provision, national banks would have authority to sell title insurance whether such statutes were enacted before or after date of enactment of the bill, and whether or not any state bank has availed itself of this authority. However, if the state legislature has not expressly authorized title insurance sales as a lawful power for its State banks, but has some other general statutory provision that may be interpreted as conveying such power (but does not explicitly do so), that general provision should not trigger parity rights for national banks unless state banks were, in fact, engaged in title insurance sales pursuant to that provision as of date of enactment of the bill. LATE

Hill/Pomeroy/Shimkus/Dingell #38 Adds a new section 311 at the end of subtitle A of title III, "Preservation of State Insurance Consumer Protection Laws", to ensure that consumers continue to receive the protections of state insurance laws whether they buy insurance from a bank or from an insurance agent.

Hill/Pomeroy/Shimkus/Dingell #39 Adds a new section 311 at the end of subtitle A of title III, "Disclosure of Preemption of Certain State Insurance Laws Required", to require that an insurance consumer be informed, if the entity with which the consumer is dealing, fails to comply with any state insurance consumer protection law due to Federal preemption of such law under this Act.

Hinchey #2 Prohibits banks from imposing a fee on non-customers who use their automated teller machines.

Inslee #29 Gives savings and loan holding companies (SLHCs) comparable authority to engage in limited non-financial activities under section 6(f) and developing activities under section 6(g). Giving SLHCs this authority is consistent with the purposes of the legislation, including enhancing competition in the financial services industry and reducing legal barriers preventing affiliation.

Inslee #30 Makes a technical correction to the bill to give the relatively few existing multiple savings and loan holding companies the same powers to engage in financial activities, such as affiliation with insurance and securities firms, as the newly authorized financial holding companies and the newly created savings and loan holding companies would enjoy under the bill and also eliminates any question about whether a financial services company could acquire a newly chartered thrift.

Jackson-Lee #23 Directs the Comptroller General of the U.S. to conduct a study of the extent to which the lack of availability of a full-range of financial services in low- and moderate-income neighborhoods and to persons of modest means by regulated financial institutions has resulted in an undue reliance in such neighborhoods on check cashing services which impose a fee equal to 1% or more of the amount of the transaction.

King/Velazquez #1 Modifies provisions in the bill concerning restrictions on foreign banks to provide equal treatment for foreign banks doing business in the United States.

Kleczka #48 Requires consumer consent for any transfer of their Social Security Number from a financial service institution to a third party.

LaFalce/Vento/Frost/Watt/Lee #71 Restores important consumer protection provisions regarding the sale of insurance and securities products; prohibits discriminatory redlining practices regarding insurance sales. LATE

Largent #8 Clarifies the ambiguity in Title IV by allowing the Fed to make the sole determination to approve or disapprove the transfer of unitary thrift holding companies to commercial firms.

Largent #66 Prohibits large commercial companies from purchasing over 600 banking institutions known as "unitary thrift holding companies" thus closing a huge loophole which would have permitted the mixing of banking and commerce; Requires the General Accounting Office to conduct a study to examine the economic implications of commercial firms owning financial institutions, as well as determining the ability of the Office of Thrift Supervision to regulate holding companies. LATE

Lee/Campbell/Gutierrez/Waters/Schakowsky/Tubbs-Jones/Meeks/Frank #49A Aims to discourage, prevent and abolish the discriminatory practice of denying or discriminating against women and minority applicants for homeowner's insurance and mortgage services otherwise known as "redlining".

Luther #45 Amendment to Markey/Dingell/Stupak/Barton. Clarifies that State Attorney's General may bring a civil action on behalf of their residents against any financial institution that is engaging in a pattern of practice that violates the Markey, et al privacy amendment.

McCollum #21 Requires all agreements made pursuant to the Community Reinvestment Act be provided to the banking regulators and disclosed to the public.

McCollum #22 Strikes all language in Title IV of the bill, preserving the current law with regard to the thrift charter.

Johnson (CT)/Maloney (CT) #53 Changes the date by which an application for a thrift charter can be submitted to July 1, 1999.

Maloney (NY) #11 Requires the user of an ATM to be notified of all fees associated with the transaction, including fees charged by the host machine, the financial institution holding the account and any other party involved in the transfer.

Maloney (NY) #12 Requires that on the customer's monthly statement, the credit card issuer must disclose how long it would take for the cardholder to pay off the entire balance if he/she only continues to pay the monthly minimum requirement and no further charges are made.

Markey #10 Allows consumers the right to say "no" or "opt-out" to a financial institution transferring or selling a consumer's personal financial information to its affiliates or to third parties.

Martinez #44 Creates a new law that would treat Community Commerce Bank, a state-chartered industrial thrift, which is controlled by a not-for-profit community development corporation and lends only in low-income East and South Central Los Angeles, exactly as a federal credit union.

Metcalf/Ehrlich #36 Deletes provisions that would restrict affiliations of savings associations and commercial entities. Provides for a joint study and report on the issue of such affiliations by the General Accounting Office and the Federal Reserve Board.

Metcalf #68 Amendment to Rules Substitute. Clarifies language in the Home Owners' Loan Act on whether a savings association or a company can acquire another entity. LATE

Metcalf #69 Amendment to Banking Committee Print. Clarifies language in the Home Owners' Loan Act on whether a savings association or a company can acquire another entity. LATE

Nussle #40 Prohibits the issuance of credit cards to any consumer under the age of 18.

Oxley/Pryce/Roukema/LaFalce/Vento/Frost #73Imposes on all financial institutions an "affirmative and continuing obligation" to respect the privacy of customers and to protect the security and confidentiality of customer's nonpublic personal information; requires regulatory standards to insure security and confidentiality of customer records and information to protect against unauthorized access and use; requires that consumers be given opportunity to opt-out of the disclosure of their private information with unaffiliated third parties, with limited exceptions for handling of consumer initiated transactions, consumer reporting, compliance with law, regulation, examination requirements, etc; prohibits unaffiliated third parties that receive confidential customer information from a financial institution for any purpose from sharing this information with any other unaffiliated parties; requires all financial institutions to disclose to customers their policies and practices for collecting customer information, for protecting confidential information, and for sharing such information with unaffiliated parties; prohibits financial institutions from sharing with unaffiliated parties any credit card, savings, and transaction account numbers or other means of access to such accounts for purposes of marketing to the consumer; enhances regulatory authority to detect and enforce violations of consumer privacy requirements; requires study of current information sharing among affiliates and unaffiliated third parties; requires regulations to implement these privacy protections and security standards and authorizes the regulators full enforcement authority under existing standards. LATE

Paul/Barr/Campbell #49 Eliminates authority to require to "Know your Customer" ("profiling" of accounts and source of funds); Replaces "Suspicious Activity Report" (SARs) with a "safe harbor" for financial institutions to report transactions "relevant to a possible violation of law or regulation"; Adjusts the Currency Transaction Report (CTR) limit for inflation; adds privacy advocate to the Bank Secrecy Act Advisory Group and adds a "sunshine" clause to their meetings; Expires Bank Secrecy Act documents after expiry of statute of limitations (unless being used in an investigation); and Directs the Federal banking agencies to recommend ways to conform penalties for the Bank Secrecy Act to be no more severe than those dictating penalties for "safety and soundness".

Pomeroy #72 Adds a new section that ensures that consumers continue to receive the protections of state laws related to the fair payment of insurance claims whether they buy insurance from a bank or from an insurance agent. LATE

Roukema #47 Requires the Securities and Exchange Commission to consult and coordinate comments with the appropriate Federal banking agency on the issue of loan loss reserves before issuing any such comments, taking any action or rendering any opinion on such issue or practices for insured depository institutions or their holding companies.

Royce/Dunn/Ose #27 Moves the grandfather date for unitary thrift holding companies forward from March 4, 1999, to the date of enactment of the Financial Services Act of 1999.

Royce/Dunn/Ose #28 Provides for Federal Reserve Board review of transactions involving the acquisition of a unitary holding company by a company engaged in commercial activities during the 1-year period in which the Comptroller General will study the matter, and for 1 year thereafter.

Rush #63 Technical amendment to section 109, in order to clarify the intent of the section, is to gather both projected economic impact data and actual economic impact data regarding the effect of financial modernization on smaller financial institutions. LATE

Rush #64 Regulates Payday Loan practices by requiring that States adopt minimal standards which ensure consumer protection. LATE

Rush #65 Prohibits redlining practices in the marketing and sales of property insurance. LATE

Sanders #34 Prohibits Automatic Teller Machine (ATM) owners from charging the consumer a surcharge for using their ATM's.

Sanders #35 Requires a study by the General Accounting Office (GAO) of the impact of the enactment of the bill on the consolidation and concentration of financial services, and the effects on small businesses and individual consumers.

Schakowsky/Lee/Gutierrez/Watt #17 Provides for a 5-year study by the U.S. Treasury Department with the Federal bank regulators on the effect of the bill on small business and farm lending.

Schakowsky/Lee/Gutierrez #18 Requires that bank regulators report CRA Ratings for a federally regulated depository institution by state for each state where the institution has a branch.

Schakowsky/Lee/Gutierrez #19 Requires banks to allow each depositor to conduct banking business with an individual employee of the bank three time per month for free.

Slaughter #4 Limits the total revolving credit extended to individual students under the age of 21 to no more than 20% of their income unless parents co-sign for the debt.

Slaughter #5 Prohibits credit card issuers from increasing the debt limits for young people whose accounts are co-signed by a parent or guardian, unless the parent or guardian approves the increase in writing.

Slaughter #6 Requires that the typeface of credit card disclosures in solicitations and agreements concerning consumer credit card accounts be as large as the regular type in the solicitation and agreement.

Slaughter #7 Expresses the "Sense of the Congress" that financial advisors, trust officers, insurance salespersons and estate planners are encouraged to treat women fairly in the selling of wills and trusts.

Toomey #13 Maintains current law with regard to who can negotiate, execute, and book swaps transactions, while guaranteeing that only "qualified investors" are involved in the most complex swaps.

Towns #70 Amends Section 401 of the bill regarding the acquisition of a thrift by certain companies after March 4, 1999 to substitute for that date May 31, 1999. LATE

Velazquez #16 2nd Degree amendment to amend any amendment offered designed to authorize the Community Development Financial Institutions Fund to implement the "Program for Investments and Micro Entrepreneurs" Program.

Vento #20 Prohibits the sharing of personally identifiable information gathered via the Internet to third parties, without the subscriber's prior informed consent.

Waters #9 Requires that subsidiary depository institutions of qualified bank holding companies have a demonstrable record of performance in the provision of low-cost lifeline bank accounts.

Watt #33 Clarifies that institutions or their subsidiaries could not require customers to purchase insurance products from them as a condition of receiving a loan and that customers could purchase such insurance product from another source.

Weiner #4Prohibits banks from charging Deposit Item Returned (DIR) fees, charges that banks impose on customers who receive and deposit non-sufficient (NSF) checks.

* Summaries derived from information submitted by the amendment sponsors.