Clarke, Hon. Robert L., Comptroller of the Currency Gray, Hon. Edwin J., Chairman, Federal Home Loan Bank Board [FHLBB]...... Jepsen, Hon. Roger W., Chairman, National Credit Union Administration MATERIAL SUBMITTED FOR INCLUSION IN THE RECORD Gray, Hon. Edwin J., response to request of Congressman Jim Leach for more Johnson, Hon. Manuel H., response to request of Chairman St Germain in Miller, Hon. James C., III, Director, Office of Management and Budget, letters Chairman Jake Garn, Senate Banking Committee, dated May 28, 1986. Chairman St Germain and ranking minority Member Hon. Chalmers P. Conference of State Bank Supervisors [CSBS], statement on behalf by John E. Malarkey, State Banking Commissioner for the State of Delaware and Seidman, Hon. L. William, legal memorandum to John H. Carley, General Counsel, Office of Management and Budget from Justice Department Fox, Alan, legislative representative, Consumer Federation of America [CFA]; on behalf of CFA, Consumers Union [CU] and the Public Interest Research Guildroy, Jack, member, National Legislative Council, American Association Killebrew, Randall A., vice chairman of government relations, American McEldowney, Ken, director, San Francisco Consumer Action.... Overly, Cathy, assistant director of legislation, National Treasury Employees Lehman, Hon. Richard H., opening statement on H.R. 2282 Letters of invitation to witnesses of this day's hearings.. 370-375 National Association of Federal Credit Unions [NAFCU], letter from Robert 378 National Council of Savings Institutions, letter from John H. Rousselot, presi- DEPOSITORY INSTITUTION EXAMINATION IMPROVEMENT ACT TRUTH IN SAVINGS ACT WEDNESDAY, JUNE 4, 1986 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON FINANCIAL INSTITUTIONS Washington, DC. The subcommittee met, pursuant to call, at 10 a.m., in room 2128, Rayburn House Office Building, Washington, DC, Hon. Fernand J. St Germain (chairman of the subcommittee), presiding. Present: Chairman St Germain; Representatives Barnard, Wylie, McKinney, and Wortley. Also present: Representatives Lundine and Carper of the full committee. Chairman ST GERMAIN. The subcommittee will come to order. This morning we open hearings on two different, but equally important pieces of legislation-H.R. 2282, the Truth in Savings Act, which has long been championed by our colleague, Richard Lehman of California, and an amended version of H.R. 3567, the Depository Institution Examination Improvement Act, introduced originally by Representatives Carper of Delaware and Lundine of New York. Mr. Lehman's bill is an attempt to give consumers the information necessary to make rational judgments on where and how best to invest their savings in depository institutions. Too often consumers have been confronted by advertisements which purposely or inadvertently misstate, obscure, and exaggerate interest rates and yields on various savings instruments. Admittedly, it is a difficult area where we must try to assure the consumer meaningful and accurate information without burdening advertisements with new complexities and without discouraging legitimate competition for the savings dollar. However, I feel strongly that the consumer-including the smaller savers are entitled to a clear unequivocal statement of what they can expect to earn on their savings. There shouldn't be any flimflam in this area. Mr. Carper and Mr. Lundine's bill is an attempt to improve the strength of our corps of depository institutions examiners and is cosponsored by some 34 Members of the Banking Committee. This represents a clear statement of the longstanding support of this subcommittee for our frontline troops in the battle to maintain safe and sound financial institutions. I am among them because I feel strongly that the examination efforts of the Federal financial regulatory agencies must be upgraded. Over the past decade and a half, I have chaired long and thorough hearings into depository institution failures, including USNB, Franklin, Penn Square, Continental, and Golden Pacific. Through all those years, I have pushed, shoved, and done everything possible to encourage these agencies to give examination and supervision activities stronger support. One of the measures I strongly supported was establishment of the Federal Financial Institutions Examination Council. Its purpose was to improve examiner resources and coordinate agency actions. I note with approval that the Examination Council is now studying ways to make working conditions for examiners more attractive. I commend the present Council Chairman, Edwin Gray, for initiating this effort and look forward to the results of this study. Some provisions of the Carper/Lundine bill would remove the regulatory agencies further from budget, appropriation, and other controls exercised by the legislative and executive branches. This, of course, would mean relief from the strictures of Gramm-Rudman which now has a stranglehold on all activities and programs of the Federal Government from education, housing, agriculture, defense to the wide array of Federal regulatory agencies. While we all appreciate the problems created by GrammRudman for the financial regulatory agencies, we must be careful that our efforts to solve these problems do not lead to any weakening of other oversight and control over these agencies. We are trying to improve the efficiency of these agencies, not diminish their accountability. [The text of H.R. 2282 and H.R. 3567 follow:] I 99TH CONGRESS 1ST SESSION H. R. 2282 To provide for the uniform disclosure of the rates of interest which are payable on savings accounts. IN THE HOUSE OF REPRESENTATIVES APRIL 30, 1985 Mr. LEHMAN of California (for himself, Mr. ST GERMAIN, Mr. Gonzalez, Mr. ANNUNZIO, Mr. MITCHELL, Mr. FAUNTROY, Mr. NEAL, Mr. LaFalce, Mr. LUNDINE, Ms. OAKAR, Mr. VENTO, Mr. GARCIA, Mr. ROEMER, Mr. COOPER, MS. KAPTUR, Mr. TORRES, Mr. MANTON, Mr. FUSTER, Mr. WORTLEY, Mr. MCKINNEY, Mr. ACKERMAN, Mr. BATES, Mrs. BOXER, Mr. BERMAN, Mr. BONIOR of Michigan, Mr. BRYANT, Mr. BROWN of California, Mrs. BURTON of California, Mrs. BYRON, Mr. CONTE, Mr. CONYERS, Mr. COELHO, Mr. DE LUGO, Mr. DYMALLY, Mr. DIXON, Mr. DOWNEY of New York, Mr. DURBIN, Mr. DWYER of New Jersey, Mrs. COLLINS, Mr. DELLUMS, Mr. EDWARDS of California, Mr. FOGLIETTA, Mr. FAZIO, Mr. Frost, Mr. Guarini, Mr. HawkINS, Mr. HAYES, Mr. HEFTEL of Hawaii, Mr. KOSTMAYER, Mr. LELAND, Mr. LEVINE of California, Mr. MARTINEZ, Mr. MACKAY, Mr. MARKEY, Mr. MILLER of California, Mr. MINETA, Mr. MOAKLEY, Mr. MOODY, Mr. Mrazek, Mr. MURPHY, Mr. Owens, Mr. PaNETTA, Mr. PRICE, Mr. RANGEL, Mr. ROYBAL, Mr. SAVAGE, Mr. SAXTON, Mr. SCHEUER, Mr. SEIBERLING, Mr. STARK, Mr. STOKES, Mr. STUDDS, Mr. Towns, Mr. WAXMAN, Mr. WEISS, Mr. WHEAT, Mr. WISE, and Mr. YOUNG of Alaska) introduced the following bill; which was referred to the Committee on Banking, Finance and Urban Affairs 1 A BILL To provide for the uniform disclosure of the rates of interest which are payable on savings accounts. Be it enacted by the Senate and House of Representa 2 tives of the United States of America in Congress assembled, |