Press Release of Senator Crapo
Crapo brokers regulatory relief agreement
House and Senate reach agreement on financial services industry package
Contact: Susan Wheeler, (202) 224-5150
Washington, DC – Agreement between the House Financial Services Committee and the Senate Banking Committee on a financial services industry package culminated today with expected House passage of legislation that will provide regulatory improvements in that industry. The measure, authored by Idaho Senator Mike Crapo, brings regulations up-to-date and in line with current technology and practices. The Financial Services Regulatory Relief Act of 2006 (S. 2856) cleared the Senate unanimously in May and was sent to the House for consideration.. The package will now be sent back to the Senate for approval. In applauding the House action, Crapo, a member of the Senate Banking Committee who has been the Senate leader in prompting reforms in the financial services industry that will ultimately improve customer services, said, “This reform legislation has been a long time in coming and I am pleased that Chairman Oxley and others have worked with me to reach agreement on many issues that remained in contention. In particular, with regard to the nearly-seven-year logjam over the SEC’s proposed Regulation B (or Reg B), Congress has decided to intervene. Joint rulemaking between the SEC and Federal Reserve Board, as required by this legislation, will give effect to the congressional intent underlying the Gramm-Leach-Bliley Act. Specifically, the legislation is intended to ensure that regulators do not create a new and burdensome regulatory maze of requirements that would disrupt or interfere with the business practices of banks and thrifts that offer traditional bank products and services to their customers. The creation of requirements like those proposed in Reg B would ultimately force banks and thrifts to stop offering their customers the very same products and services that we were seeking to protect in Gramm-Leach-Bliley. It has always been my intention to push for regulatory reform that would streamline and improve the transparency and reporting issues involved in the financial services industries.” Following is a list of highlighted modifications from the Senate-passed version of S. 2856. The House and Senate have reached agreement on the items included. Section 101: This section has been modified to require the SEC and the Federal Reserve Board to jointly adopt rules implementing the exceptions to the definition of broker under Section 201 of the Gramm-Leach-Bliley Act. The procedure for the Federal banking agencies to seek court review has been eliminated. Section 203: This section has been added to delay the effectiveness for five years of the authorization for the Federal Reserve to pay interest on reserves and the increased flexibility to establish reserve requirements. Section 305: This section has been added to enhance the authority for banks to make community development investments. This provision increases from 10 to 15 percent the amount of unimpaired capital and surplus that a national bank may invest, directly or indirectly, in investments designed to promote the public welfare. The provision amends Section 24 (Eleventh) of the National Bank Act to state that such investments are those designed primarily to benefit the welfare of low- and moderate-income communities or families. In addition, the provision requires that each investment under this paragraph by a national bank must meet the test. The provision makes conforming amendments to the Federal Reserve Act as it applies to the same type of investments by state member banks. Section 505: This section has been added to make certain amendments relating to non-federally insured credit unions. Specifically, this section amends Section 43 of the Federal Deposit Insurance Act (FDIA), which contains mandatory disclosures and other requirements for depository institutions lacking federal deposit insurance (primarily state-chartered credit unions). The amendments update the section’s disclosure provisions, repeal certain provisions as inappropriate and unnecessary, ensure that state supervisors of the institutions and private insurers can enforce the section, and ensure effective Federal Trade Commission (FTC) enforcement. Section 802: This section has been added to make amendments to the Fair Debt Collection Practices Act. These include: (1) a clarification that formal pleadings are not initial communications; (2) an exception to the definition of initial communication for forms or notices that do not relate to the collection of a debt and are required by the Internal Revenue Code of 1986, Title V of the Gramm-Leach-Bliley Act, or Federal or State law relating to notice of data security breach or privacy; and (3) a clarification that debt collection activities and communications may continue during the 30-day validation period as long as they do not overshadow or are inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor. Section 710: This section has been modified to permit the Federal Reserve Board and the Office of Thrift Supervision (OTS) to grant exemptions from the prohibition on employing persons convicted of certain types of criminal offenses from certain relationships with insured depository institutions.
To directly link to this news release, please use the following address: http://us.senate.gov/wsrands/record.cfm?id=263955
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