From: "Maryellen J. Lewis" <lewisma9@pilot.msu.edu> Subject: Setback for Community Reinvestment Cc: CAROL JUERGENS <JUERGENSC@commchange.org>, Hubert Van Tol <hvantol@centuryinter.net> X-Info: comm-org

Hello all: For those concerned with urban disinvestment and the accountability of institutions, the "Financial Modernization" bill is a huge trojan horse. If you haven't been tracking it: Friday was a major setback, as a House Subcommittee passed on the "financial modernization" bill, WITHOUT ADDRESSING CRITICAL ISSUES OF COMMUNITY INVESTMENT AND THE IMPACTS ON LOW-INCOME POPULATIONS. Savvy community leaders are still pressing hard, including the national alliance of grassroots Community Reinvestment Organizations called the National Community Reinvestment Coalition (NCRC, 733 15th St. NW, Suite 540, Washington DC 20005, 202-628-8866) and the Center for Community Change (contact information below). Isn't it time to become informed about this sleeper?

Maryellen

************************************************ Center for Community Change Policy Alert # 105 October 24, 1997

HOUSE SUBCOMMITTEE VOTES TODAY ON "FINANCIAL MODERNIZATION" BILL; LOW INCOME CONSUMER AND COMMUNITY REINVESTMENT CONCERNS UNLIKELY TO BE ADDRESSED

BACKGROUND: To the surprise of many, Rep. Michael Oxley [R-OH], Chairman of the Finance and Hazardous Subcommittee of the House Commerce Committee, scheduled a surprise Friday (10/24) markup for H.R. 10, the "Financial Modernization" bill. At Friday's markup, Rep. Oxley was expected to offer a substitute amendment to the bill that was passed last June by the Banking Committee. The Oxley substitute includes provisions that allow broad affiliations between banks, securities firms, and insurance companies. These provisions are intended to pave the way for a wholesale concentration of the banking industry, resulting in as few as six mega-banks surviving the merger frenzy that is expected to follow.

Just the beginning of last week, the bill appeared to be stymied in Subcommittee, as a result of strong opposition primarily by the insurance agents lobby. However, Oxley appears to have worked out a compromise on the issue of who will regulate insurance sales, which had deeply divided the banking and insurance lobbies. Despite these latest negotiations, it is unclear whether the various banking industry trade groups have hitched their wagons to this particular bill. Consequently, it is unclear whether the House Republican leadership intends to take this legislation to the House floor before Congress adjourns, as expected, on November 7.

Even with these latest developments, the legislation the Subcommittee voted on Friday almost totally ignores community reinvestment and low income consumer concerns (For further background information, see Policy Alert #104. Dial Fax-on-Demand at 703/716-7349 and request doc # 508). As a result, many of the major national community organizations continue to oppose passage of this sweeping banking deregulation measure.

Should the bill have pass the subcommittee Friday, which seems likely, it could proceed very quickly to the full Commerce Committee, either by this Wednesday (10/29) or Thursday (10/30). Efforts are underway to line-up support from full Committee members to offer amendments that would expand community reinvestment requirements to securities firms and insurance companies that chose to affiliate with banks, condition broader affiliates upon a requirement that banks offer lifeline banking accounts; and, expand CRA to the "wholesale financial institutions" (i.e., uninsured banks) that would be authorized by the proposed legislation. Stay tuned for additional details on these amendments.

ACTION NEEDED: Please contact Commerce Committee members from your state immediately. Ask them to oppose the financial modernization bill from moving forward without the inclusion of strong and meaningful community reinvestment safeguards. You can reach the Capitol Hill switchboard by calling 202/225-3121.

Commerce Committee Members: Republicans: Bliley, Chair [VA]; Tauzin [LA]; Oxley [OH]; Bilirakis [FL]; Schaefer [CO]; Barton [TX]; Hastert [IL]; Upton [MI]; Stearns [FL]; Paxon [NY]; Gillmor [OH]; Klug [WI]; Greenwood [PA]; Crapo [ID]; Cox [CA]; Deal [GA]; Largent [OK]; Burr [NC]; Bilbray [CA]; Whitfield [KY]; Ganske [IA]; Norwood [GA]; White [WA]; Coburn [OK]; Lazio [NY]; Cubin [WY]; Rogan [CA]; Shimkus [IL]. Democrats: Dingell, Rnk.Mem. [MI]; Waxman [CA]; Markey [MA]; Hall [TX]; Boucher [VA]; Manton [NY]; Towns [NY]; Pallone [NJ]; Brown [OH]; Gordon [TN]; Furse [OR]; Deutsch [FL]; Rush [IL]; Eshoo [CA]; Klink [PA]; Stupak [MI]; Engel [NY]; Sawyer [OH]; Wynn [MD]; Green [TX]; McCarthy [MO]; Strickland [OH]; DeGette [CO].

FOR FURTHER INFORMATION CONTACT: Allen Fishbein or Debby Goldberg at CCC's Neighborhood Revitalization Project, 202/342-0567 or fax 202/333-5462.

~~~~ Note: To receive a document from our Fax on Demand service, dial 703/716-7349 and follow the automated instructions. If you did not receive your fax, received an incomplete fax, or if you experience technical difficulties, dial 703/716-0600 to speak to a person. To receive back alerts, or an index of documents, request document #500 from the automated system.