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Floor Statement For Immediate Release: February 27, 2007 REP. FRANK FLOOR STATEMENT ON DEPOSITORY INSTITUTION COMMUNITY DEVELOPMENT INVESTMENTS ENHANCEMENT ACT (House of Representatives - February 27, 2007) --- Mr. Speaker, I rise in support of H.R. 1066. It does occur to me on reflection that we should have asked the gentleman from Florida and the gentleman from Washington, Mr. Hastings and Mr. Hastings, to join in supporting this bill given its number. But in their absence, I will note that this is a bill that passed the House last year unanimously as part of a larger regulatory relief bill that came out of the Committee on Financial Services. It went to the Senate, and the Senate passed much of what we sent them but not all of it. The Senate deleted some provisions. We, in the interest of getting some legislation through, accepted the Senate's proposal, and so much of what we sent originally did become law. Some pieces did not. This is a piece that provides more flexibility for banks that are engaging in what is called, and it is a particular legal term here, public welfare investments. Banks are allowed to spend, invest up to 15 percent of their capital in what are called public welfare investments. This would allow that very good policy some more flexibility. I would note, that, for instance, the Association of Affordable Housing Lenders, people who build subsidized housing, are in favor of this change. What it does is it broadens the definition. It doesn't change the 15 percent, but it gives more flexibility. We have this situation where we do want these investments to be for the benefit of low and moderate income people. But it is one thing to say that they should generally be for the benefit of low and moderate income people, and another to strictly confine them to areas that have this direct benefit. What you do is you lose the flexibility we would like. Mr. Speaker, I will include in the record at this point letters from John Reich, the Director of the Office of Thrift Supervision, and John Dugan, the Comptroller of the Currency. OFFICE OF THRIFT SUPERVISION, DEPARTMENT OF THE TREASURY, Washington, DC, February 23, 2007. DEAR CHAIRMAN FRANK AND RANKING MEMBER BACHUS: I am writing to provide my support for H.R. 1066, the ``Depository Institution Community Development Investment Enhancements Act,'' legislation that you recently introduced and that I understand will soon be considered by the House. H.R. 1066 will enhance the ability of savings associations to support important public welfare initiatives. I encourage Congress to take swift action on this bill. Similar to Section 202 of H.R. 3505, the ``Financial Services Regulatory Relief Act of 2005,'' which passed on a bipartisan basis in the full House of Representatives and H.R. 6062, the ``Community Development Investment Enhancements Act of 2006,'' which also passed on a voice vote by the full House, H.R. 1066 will enable savings associations to support important community development programs. Specifically, H.R. 1066 will increase the ability of federal savings associations to make investments primarily designed to promote the public welfare of low- and moderate-income communities and families through the provision of housing, services, and jobs. Your bill accomplishes this by raising the limits on the ability of federal thrifts to invest in entities primarily engaged in making these public welfare investments. Thank you for your leadership in sponsoring this important legislation and your continued interest is this issue. I applaud your efforts to remove barriers to the growth and stability of low- and moderate-income communities and urge immediate consideration of H.R. 1066. If you have any questions, please do not hesitate to contact me or Kevin Petrasic, Managing Director of External Affairs, at 2012-906-6452. Respectifully yours, -- Comptroller of the Currency Administrator of National Banks, Washington, DC, February 26, 2007. DEAR CHAIRMAN FRANK: Thank you for having introduced H.R. 1066, the Depository Institution Community Development Investments Enhancement Act, which would restore the preexisting, longstanding authority of national and state member banks to make investments ``designed primarily to promote the public welfare, including the welfare of low- and moderate-income communities or families.'' Returning to this standard will restore several major categories of public welfare investments in areas determined by federal, state and local governments to be in need of such investments. These categories of investments, which were eliminated with passage of The Financial Services Regulatory Relief Act of 2006, include investments that: Revitalize or stabilize designated disaster areas, including areas devastated by hurricanes. Revitalize or stabilize underserved or distressed middle-income rural communities. Utilize New Markets Tax Credits to promote development in middle-income census tracts with greater than 20 percent poverty rates. Finance mixed-income affordable housing in govemment targeted areas for revitalization. Since 1992, the preexisting standard has been implemented by the OCC in a transparent manner to generate national bank community development investments in every state of the nation amounting to over $16 billion. Every approved public welfare investment made by a national bank is posted by the OCC on our public website. Further, all public welfare investments made by national banks have been, and will continue to be under the provisions of H.R. 1066, subject to key controls designed to protect against risks to the safety and soundness of the bank and to the deposit insurance fund. Restoring the previously qualifying categories of investments, in combination with the recent increase in allowable investments to 15 percent of capital and surplus, can potentially generate as much as $30 billion in national bank investment to help revitalize local ommunities across the nation--without the use of any taxpayer funds. I urge prompt passage of H.R. 1066 to help achieve this significant impact. Sincerely, John C. Dugan, Mr. Speaker, in Mr. Dugan's letter, for example, he says giving this flexibility would allow ``finance mixed-income affordable housing in government targeted areas for revitalization.'' It maintains the purpose of helping low and moderate income people, but it provides the flexibility in doing it, which we would all support. I know of no opposition to the bill. People might have raised the question, well, the groups that are the primary advocates, the low and moderate income people, do they think it might hit them? No, the answer is they do not. And several groups that try to promote this kind of mixed economic benefit development think this would be useful. As I said, it is a bill the House passed last year. It is supported by banks. We have banks that want to be socially responsible, within the context of making a profit and meeting their safety and soundness requirements. We should not unduly burden them when they try to do that. So I hope that the House will once again pass this, and that this time, looking at them alone with a little more leisure, the Senate will go along. |
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