jsilver at essential.org
05-07-1999, 02:50 PM
NCRC Alert
Senate Strikes Blow Against Community Reinvestment Act(CRA): CRA in
Jeopardy as Banking Bill Moves to the House
Dear Friends of Community Reinvestment:
On Thursday, May 6, the United States Senates passed a banking bill, S.900,
with anti-CRA provisions that would cripple the Community Reinvestment Act.
S.900 was authored by Senator Phil Gramm (R-TX). If the anti-CRA
provisions of S. 900 were enacted into law, citizens, elected officials,
and religious leaders would not be able to effectively offer comments to
federal banking agencies when banks are merging, which is a key time for
CRA enforcement. Also, more than 3,800 rural banks would be exempt from
CRA, dramatically reducing access to loans for small businesses, farmers,
Native Americans, and other populations in rural America (for more details,
please see below).
H.R. 10, the financial modernization bill in the House, is now expected to
move swiftly. It is not a direct attack against the CRA like S. 900, but
it indirectly weakens CRA by expanding the powers of banks without updating
CRA adequately. H.R. 10 passed by a huge margin in the House Banking
Committee on a vote of 51 to 8. The House Commerce Committee is scheduled
to mark-up and vote on H.R. 10 by May, 14 or next Friday. The bill would
then go to the floor of the House. A vote is likely to occur before
Memorial Day!
The National Community Reinvestment Coalition (NCRC), the nation's CRA
trade association of more than 700 community organizations and local public
agencies, believes that any financial modernization legislation must expand
CRA and strengthen the law. Specifically, we are supporting an amendment
sponsored by Representative Luis Gutierrez (R-IL) and others that would
apply CRA to mortgage companies and other financial firms that would be
allowed to affiliate with banks and that would be making loans on behalf of
the banks. Another amendment sponsored by the Congressman would require
insurance company affiliates of banks to publicly disclose data on the
race, income, and neighborhood of their policyholders. NCRC has the
amendment language available upon request.
If the House approves HR 10, a House-Senate conference will be appointed to
reconcile differences between HR 10 and S 900. Either chamber or both
chambers would have to vote again depending on the final shape of any
agreed-upon financial modernization bill.
ACTION NEEDED:
During the next week, it is critically important to contact members of the
House Commerce Committee, and ask them to support the Gutierrez amendments.
Also, contact your Representative in case the amendments are not adopted by
the Commerce Committee, and the amendments need to be introduced on the
floor of the House. This is the essential time to contact all members of
the House, urging them to vote against any financial modernization bill
that hurts CRA and does not significantly expand the law.
Contact members of the Senate. Thank Senators who voted against the bill,
but get a sense of whether weakening CRA was one of the reasons they voted
no. Reaffirm the vital importance of strengthening CRA in any banking bill.
The final vote on passage of S. 900 was 54 to 44 mostly along partly lines,
except Senator Hollings (D-SC) who voted for passage. Moderate Republicans
who supported CRA with votes last year, but voted for S. 900, are listed
below. Inform these Senators that you are disappointed with their vote,
and that they must not support any bill that weakens CRA (Jeffords (R-VT)
and Specter (R-PA) voted for a Democrat amendment that would have stripped
the anti-CRA provisions from S. 900. The amendment failed. Then, the two
Senators voted for final passage of S. 900).
The Capital Hill switchboard is (202) 224-3121. The National Community
Reinvestment Coalition (NCRC) will keep you informed as news develops about
the financial modernization bills. Call us on (202) 628-8866 if you have
any questions.
Financial Modernization Bills and How They Hurt Communities
How the House and Senate Bills Weaken CRA
… Reduces CRA coverage: Allows banks to affiliate with insurance companies,
securities firms, and mortgage companies without expanding CRA to the
non-bank financial companies. The non-bank companies could conduct much of
the lending and offer many of the bank services on behalf of the bank. CRA
can end up covering much less of the lending and banking activity in this
country.
… Exempts most mergers between banks and non-bank financial companies from
application requirements to federal regulatory agencies. Community groups
would not be able to comment to regulators on the CRA performance of
companies involved in these mergers. H.R. 10 exempts mergers of this type
when combined assets of the merging parties are less than $40 billion. S.
900 does not have any application requirement for these mergers.
… No Data Disclosure Requirement for Insurance Companies. Insurance
companies affiliating with banks should be required to submit data on the
race and income of their borrowers.
How Senator Gramm's Bill Cripples CRA
… Same problems as in the House bill, and much more.
… Exempts small banks in rural areas under $100 million from CRA. This
amounts to more than 3,800 banks or 72 percent of the rural banks in the
country! In rural areas and towns, small banks often enjoy a near
monopoly. Since competition is not a spur to serving all customers, CRA is
the primary incentive for banks in these communities to serve low- and
moderate-income customers.
… "Safe Harbor" provision makes it nearly impossible for community groups,
public officials, and citizens to offer comments during the merger process
if the bank has a Satisfactory or Outstanding CRA rating. Any person
commenting would have to prove that the banks in question no longer deserve
Satisfactory or Outstanding ratings. This is virtually impossible since
most large banks operate in several states. A person commenting from a
particular locality will not know the record of the bank in all of its
market areas. Yet, the person commenting would have pertinent information
about how planned branch closings and other changes due to the merger would
affect his or her community. These concerns must always be heard by the
federal banking agencies during the merger approval process.
… S. 900 Removes Modest Community Reinvestment Requirement for New
Financial Conglomerates - H.R. 10 has a requirement that a bank must have
a Satisfactory or Outstanding CRA rating if it wants to merge with an
insurance company or a securities firm. S. 900 deletes this requirement.
Since more than 98 percent of banks and thrifts have passing ratings, this
provision ensures that those lenders that truly fail to abide by CRA do not
enjoy new powers granted by a financial modernization bill.
… S. 900 Removes CRA for Wholesale Financial Institutions - H.R. 10 expands
CRA to wholesale financial institutions (which would be newly authorized by
the legislation and would be non-federally insured investment banks that
would only accept deposits of more than $100,000). S. 900 removes this
modest extension of CRA. Neither H.R. 10 nor S. 900 extends CRA to the
many other companies that would be engaged in lending.
Amendments Needed to Fix the Financial Modernization Bills
… Any final financial modernization bill must not have the safe harbor and
small bank exemption provisions described above.
… Expand CRA to all non-bank affiliates that offer loans and other bank
services (amendment sponsored by Rep Gutierrez): CRA will cover a much
smaller portion of the lending activity in the country if it remains
confined to banks while insurance agents, mortgage companies, and other
financial companies continue to expand their lending business. A recent
example of this problem is State Farm's new thrift (a loophole in the
banking laws allows thrifts to own and be owned by insurance companies). A
substantial number of State Farm's 16,000 insurance agents will start
making loans in a few years. Most of this activity will not be covered by
CRA.
… Require insurance companies to disclose data (amendment sponsored by Rep.
Gutierrez): The HMDA (Home Mortgage Disclosure Act) data has been
instrumental in helping banks and community groups identify missed market
opportunities in minority and working class neighborhoods. Like banks,
insurance companies must be required to publicly disclose data on the
characteristics of their customers including race, income, and the
neighborhoods in which they reside. Data disclosure will tremendously
increase access to home, automobile, and small business insurance products
for traditionally underserved people.
Who to Contact
… On the House Side: H.R. 10 has passed the House Banking Committee, and
is now moving to the House Commerce Committee. Contact Commerce Committee
members. It is also important to contact House leadership including Rep.
Dick Gephardt (D-MO) and Rep. David Bonior (D-MI). Contact moderate
Republicans as well. See below for list of Commerce Committee members.
… On the Senate Side: Moderate Republicans are important swing votes. See
list below for moderate Republicans and for important Democrats.
… Please carbon copy NCRC on any letters, and let us know how
Representatives, Senators, and their staffs responded to letters or over
the phone. Our phone is (202) 628-8866, and our fax is (202) 628-9800.
Key Senate Members
Republicans
Below is a list of Republicans who voted against small bank exemptions from
CRA either in the Senate Banking Committee or on the floor last year when
credit union legislation was being considered. In addition, the
Republicans with an asterisk are those who voted against a Gramm amendment
to exempt credit unions from CRA (last year there was separate legislation
dealing with credit union membership issues. There was a CRA for credit
union provision until a Gramm amendment stripped the CRA provision from the
bill).
Christopher Bond (R-MO) *
Jim Jeffords (R-VT) *
William Roth (R-DE) *
Ben Nighthorse Campbell (R-CO)
Rick Santorum (R-PA)
Arlen Specter (R-PA)
Richard Lugar (R-IN)
John Chafee (R-RI)
Pete Domenici (R-NM)
John Warner (R-VA)
Gordon Smith (R-OR)
Olympia Snowe (R-ME)
Ted Stevens (R-AK)
Susan Collins (R-ME)
Democrats
On the Democratic side, we need to make sure that Senators stand strong,
especially those that are likely to be selected for a House-Senate
conference committee. A list of key Senators are:
Paul Sarbanes (D-MD) - would be on a conference committee
Chris Dodd (D-CN) - would be on a conference committee
John Kerry (D-MA) - would be on a conference committee
TIm Johnson (D-SD) - Since he voted for a small bank exemption during
Banking Committee mark-up of S.900.
Ernest Hollings (D-SC) - since he voted for S. 900 on final passage.
Members of the House Commerce Committee
Democrats
John D. Dingell - Michigan
Henry A. Waxman - California
Edward J. Markey - Massachusetts
Ralph M. Hall - Texas
Rick Boucher - Virginia
Edolphus Towns - New York
Frank Pallone, Jr. - New Jersey
Sherrod Brown - Ohio
Bart Gordon - Tennessee
Peter Deutsch - Florida
Bobby L. Rush - Illinois
Anna G. Eshoo - California
Ron Klink - Pennsylvania
Bart Stupak - Michigan
Eliot L. Engel - New York
Thomas C. Sawyer - Ohio
Albert R. Wynn - Maryland
Gene Green - Texas
Karen McCarthy - Missouri
Ted Strickland - Ohio
Diana DeGette - Colorado
Thomas M. Barrett - Wisconisn
Bill Luther - Minnesota
Lois Capps - California
Republicans
Tom Bliley - Chairman of the Committee
W.J. "Billy" Tauzin - Lousiana
Michael G. Oxley - Ohio
Michael Bilirakis - Florida
Joe Barton - Texas
Fred Upton - Michigan
Cliff Stearns - Florida
Paul Gilmor - Ohio
James C. Greenwork - Pennsylvania
Christopher Cox - California
Nathan Deal - Georgia
Steve Largent - Oklahoma
Richard Burr - North Carolina
Brian P. Bilbray - California
Ed Whitfield - Kentucky
Greg Ganske - Iowa
Charlie Norwood - Georgia
Tom Coburn - Oklahoma
Rick Lazio - New York
Barbara Cubin - Wyoming
James E. Rogan - California
John Shimkus - Illinois
Heather Wilson - New Mexico
John B. Shadegg - Arizona
Charles W. "Chip" Pickering - Mississippi
Vito Fossella - New York
Roy Blunt - Missouri
Ed Bryant - Tennessee
Robert L. Ehrlich, Jr. - Maryland
This post transferred from the cdb-l mailing list
Senate Strikes Blow Against Community Reinvestment Act(CRA): CRA in
Jeopardy as Banking Bill Moves to the House
Dear Friends of Community Reinvestment:
On Thursday, May 6, the United States Senates passed a banking bill, S.900,
with anti-CRA provisions that would cripple the Community Reinvestment Act.
S.900 was authored by Senator Phil Gramm (R-TX). If the anti-CRA
provisions of S. 900 were enacted into law, citizens, elected officials,
and religious leaders would not be able to effectively offer comments to
federal banking agencies when banks are merging, which is a key time for
CRA enforcement. Also, more than 3,800 rural banks would be exempt from
CRA, dramatically reducing access to loans for small businesses, farmers,
Native Americans, and other populations in rural America (for more details,
please see below).
H.R. 10, the financial modernization bill in the House, is now expected to
move swiftly. It is not a direct attack against the CRA like S. 900, but
it indirectly weakens CRA by expanding the powers of banks without updating
CRA adequately. H.R. 10 passed by a huge margin in the House Banking
Committee on a vote of 51 to 8. The House Commerce Committee is scheduled
to mark-up and vote on H.R. 10 by May, 14 or next Friday. The bill would
then go to the floor of the House. A vote is likely to occur before
Memorial Day!
The National Community Reinvestment Coalition (NCRC), the nation's CRA
trade association of more than 700 community organizations and local public
agencies, believes that any financial modernization legislation must expand
CRA and strengthen the law. Specifically, we are supporting an amendment
sponsored by Representative Luis Gutierrez (R-IL) and others that would
apply CRA to mortgage companies and other financial firms that would be
allowed to affiliate with banks and that would be making loans on behalf of
the banks. Another amendment sponsored by the Congressman would require
insurance company affiliates of banks to publicly disclose data on the
race, income, and neighborhood of their policyholders. NCRC has the
amendment language available upon request.
If the House approves HR 10, a House-Senate conference will be appointed to
reconcile differences between HR 10 and S 900. Either chamber or both
chambers would have to vote again depending on the final shape of any
agreed-upon financial modernization bill.
ACTION NEEDED:
During the next week, it is critically important to contact members of the
House Commerce Committee, and ask them to support the Gutierrez amendments.
Also, contact your Representative in case the amendments are not adopted by
the Commerce Committee, and the amendments need to be introduced on the
floor of the House. This is the essential time to contact all members of
the House, urging them to vote against any financial modernization bill
that hurts CRA and does not significantly expand the law.
Contact members of the Senate. Thank Senators who voted against the bill,
but get a sense of whether weakening CRA was one of the reasons they voted
no. Reaffirm the vital importance of strengthening CRA in any banking bill.
The final vote on passage of S. 900 was 54 to 44 mostly along partly lines,
except Senator Hollings (D-SC) who voted for passage. Moderate Republicans
who supported CRA with votes last year, but voted for S. 900, are listed
below. Inform these Senators that you are disappointed with their vote,
and that they must not support any bill that weakens CRA (Jeffords (R-VT)
and Specter (R-PA) voted for a Democrat amendment that would have stripped
the anti-CRA provisions from S. 900. The amendment failed. Then, the two
Senators voted for final passage of S. 900).
The Capital Hill switchboard is (202) 224-3121. The National Community
Reinvestment Coalition (NCRC) will keep you informed as news develops about
the financial modernization bills. Call us on (202) 628-8866 if you have
any questions.
Financial Modernization Bills and How They Hurt Communities
How the House and Senate Bills Weaken CRA
… Reduces CRA coverage: Allows banks to affiliate with insurance companies,
securities firms, and mortgage companies without expanding CRA to the
non-bank financial companies. The non-bank companies could conduct much of
the lending and offer many of the bank services on behalf of the bank. CRA
can end up covering much less of the lending and banking activity in this
country.
… Exempts most mergers between banks and non-bank financial companies from
application requirements to federal regulatory agencies. Community groups
would not be able to comment to regulators on the CRA performance of
companies involved in these mergers. H.R. 10 exempts mergers of this type
when combined assets of the merging parties are less than $40 billion. S.
900 does not have any application requirement for these mergers.
… No Data Disclosure Requirement for Insurance Companies. Insurance
companies affiliating with banks should be required to submit data on the
race and income of their borrowers.
How Senator Gramm's Bill Cripples CRA
… Same problems as in the House bill, and much more.
… Exempts small banks in rural areas under $100 million from CRA. This
amounts to more than 3,800 banks or 72 percent of the rural banks in the
country! In rural areas and towns, small banks often enjoy a near
monopoly. Since competition is not a spur to serving all customers, CRA is
the primary incentive for banks in these communities to serve low- and
moderate-income customers.
… "Safe Harbor" provision makes it nearly impossible for community groups,
public officials, and citizens to offer comments during the merger process
if the bank has a Satisfactory or Outstanding CRA rating. Any person
commenting would have to prove that the banks in question no longer deserve
Satisfactory or Outstanding ratings. This is virtually impossible since
most large banks operate in several states. A person commenting from a
particular locality will not know the record of the bank in all of its
market areas. Yet, the person commenting would have pertinent information
about how planned branch closings and other changes due to the merger would
affect his or her community. These concerns must always be heard by the
federal banking agencies during the merger approval process.
… S. 900 Removes Modest Community Reinvestment Requirement for New
Financial Conglomerates - H.R. 10 has a requirement that a bank must have
a Satisfactory or Outstanding CRA rating if it wants to merge with an
insurance company or a securities firm. S. 900 deletes this requirement.
Since more than 98 percent of banks and thrifts have passing ratings, this
provision ensures that those lenders that truly fail to abide by CRA do not
enjoy new powers granted by a financial modernization bill.
… S. 900 Removes CRA for Wholesale Financial Institutions - H.R. 10 expands
CRA to wholesale financial institutions (which would be newly authorized by
the legislation and would be non-federally insured investment banks that
would only accept deposits of more than $100,000). S. 900 removes this
modest extension of CRA. Neither H.R. 10 nor S. 900 extends CRA to the
many other companies that would be engaged in lending.
Amendments Needed to Fix the Financial Modernization Bills
… Any final financial modernization bill must not have the safe harbor and
small bank exemption provisions described above.
… Expand CRA to all non-bank affiliates that offer loans and other bank
services (amendment sponsored by Rep Gutierrez): CRA will cover a much
smaller portion of the lending activity in the country if it remains
confined to banks while insurance agents, mortgage companies, and other
financial companies continue to expand their lending business. A recent
example of this problem is State Farm's new thrift (a loophole in the
banking laws allows thrifts to own and be owned by insurance companies). A
substantial number of State Farm's 16,000 insurance agents will start
making loans in a few years. Most of this activity will not be covered by
CRA.
… Require insurance companies to disclose data (amendment sponsored by Rep.
Gutierrez): The HMDA (Home Mortgage Disclosure Act) data has been
instrumental in helping banks and community groups identify missed market
opportunities in minority and working class neighborhoods. Like banks,
insurance companies must be required to publicly disclose data on the
characteristics of their customers including race, income, and the
neighborhoods in which they reside. Data disclosure will tremendously
increase access to home, automobile, and small business insurance products
for traditionally underserved people.
Who to Contact
… On the House Side: H.R. 10 has passed the House Banking Committee, and
is now moving to the House Commerce Committee. Contact Commerce Committee
members. It is also important to contact House leadership including Rep.
Dick Gephardt (D-MO) and Rep. David Bonior (D-MI). Contact moderate
Republicans as well. See below for list of Commerce Committee members.
… On the Senate Side: Moderate Republicans are important swing votes. See
list below for moderate Republicans and for important Democrats.
… Please carbon copy NCRC on any letters, and let us know how
Representatives, Senators, and their staffs responded to letters or over
the phone. Our phone is (202) 628-8866, and our fax is (202) 628-9800.
Key Senate Members
Republicans
Below is a list of Republicans who voted against small bank exemptions from
CRA either in the Senate Banking Committee or on the floor last year when
credit union legislation was being considered. In addition, the
Republicans with an asterisk are those who voted against a Gramm amendment
to exempt credit unions from CRA (last year there was separate legislation
dealing with credit union membership issues. There was a CRA for credit
union provision until a Gramm amendment stripped the CRA provision from the
bill).
Christopher Bond (R-MO) *
Jim Jeffords (R-VT) *
William Roth (R-DE) *
Ben Nighthorse Campbell (R-CO)
Rick Santorum (R-PA)
Arlen Specter (R-PA)
Richard Lugar (R-IN)
John Chafee (R-RI)
Pete Domenici (R-NM)
John Warner (R-VA)
Gordon Smith (R-OR)
Olympia Snowe (R-ME)
Ted Stevens (R-AK)
Susan Collins (R-ME)
Democrats
On the Democratic side, we need to make sure that Senators stand strong,
especially those that are likely to be selected for a House-Senate
conference committee. A list of key Senators are:
Paul Sarbanes (D-MD) - would be on a conference committee
Chris Dodd (D-CN) - would be on a conference committee
John Kerry (D-MA) - would be on a conference committee
TIm Johnson (D-SD) - Since he voted for a small bank exemption during
Banking Committee mark-up of S.900.
Ernest Hollings (D-SC) - since he voted for S. 900 on final passage.
Members of the House Commerce Committee
Democrats
John D. Dingell - Michigan
Henry A. Waxman - California
Edward J. Markey - Massachusetts
Ralph M. Hall - Texas
Rick Boucher - Virginia
Edolphus Towns - New York
Frank Pallone, Jr. - New Jersey
Sherrod Brown - Ohio
Bart Gordon - Tennessee
Peter Deutsch - Florida
Bobby L. Rush - Illinois
Anna G. Eshoo - California
Ron Klink - Pennsylvania
Bart Stupak - Michigan
Eliot L. Engel - New York
Thomas C. Sawyer - Ohio
Albert R. Wynn - Maryland
Gene Green - Texas
Karen McCarthy - Missouri
Ted Strickland - Ohio
Diana DeGette - Colorado
Thomas M. Barrett - Wisconisn
Bill Luther - Minnesota
Lois Capps - California
Republicans
Tom Bliley - Chairman of the Committee
W.J. "Billy" Tauzin - Lousiana
Michael G. Oxley - Ohio
Michael Bilirakis - Florida
Joe Barton - Texas
Fred Upton - Michigan
Cliff Stearns - Florida
Paul Gilmor - Ohio
James C. Greenwork - Pennsylvania
Christopher Cox - California
Nathan Deal - Georgia
Steve Largent - Oklahoma
Richard Burr - North Carolina
Brian P. Bilbray - California
Ed Whitfield - Kentucky
Greg Ganske - Iowa
Charlie Norwood - Georgia
Tom Coburn - Oklahoma
Rick Lazio - New York
Barbara Cubin - Wyoming
James E. Rogan - California
John Shimkus - Illinois
Heather Wilson - New Mexico
John B. Shadegg - Arizona
Charles W. "Chip" Pickering - Mississippi
Vito Fossella - New York
Roy Blunt - Missouri
Ed Bryant - Tennessee
Robert L. Ehrlich, Jr. - Maryland
This post transferred from the cdb-l mailing list