CBA Publications >> Members' Only Publications >> Advocacy Alert

Advocacy Alert- 07/08/2002

Realtors push brokerage prohibition bill at Appropriations Cmte.

A showdown on the realtor sponsored bill to amend Gramm-Leach-Bliley to remove the authority for the regulators to approve real estate brokerage and management as permissible activities for national banks and financial holding companies may be headed for a showdown next week.

The realtor provision may be offered as an amendment to the Treasury Postal Service appropriations bill on July 9 when the House Appropriations Committee marks-up that legislation.

There are six Californians, Republicans Jerry Lewis, Randy ("Duke") Cunningham and John Doolittle, and Democrats Nancy Pelosi, Lucille Royball Allard and Sam Farr who are members of the committee. All of them except Pelosi are sponsors of the realtor bill. Nevertheless, some of them may be receptive to arguments from the leadership of the committee of substantive jurisdiction, the Financial Services Committee, that the Appropriations Committee should not be the one to bring this issue to the House floor. A letter from Chairman Mike Oxley to Rep. C.W. Young (R- Fla.) protesting the amendment has already been sent. Ranking Financial Services Member, Rep. John La Falce, has similar views although he has not written on the subject. Another fact might be helpful to the banker cause: The Treasury and the Fed have already announced that the matter will not be taken up this year.

La Falce rejects re-election, stuns financial community

Rep. John La Falce, who, in addition to being the ranking Democrat on the Financial Services Committee, is also one of the most respected Members of Congress, stunned the financial community last week when he issued a short statement that he chose not to run against another qualified Democrat.

New York lost two Congressional seats as a result of redistricting, one Democratic and one Republican. State Democrats picked LaFalce's seat as the one to combine with another up state Democrat, Louise Slaughter. La Falce had been counting on the decision of a New York court to set aside the redistricting plan of the New York Legislature, but instead, that decision affirmed the plan. LaFalce had held a fundraising event just 24 hours before his stunning announcement - an indication of how unexpected the court decision was. La Falce came to Washington in 1972, a member of the so-called Watergate class when Democrats added substantially to their majorities in both houses. LaFalce was a business friendly Democrat who will be sorely missed by the financial services industry.

This leaves Rep. Barney Frank (D-Mass.) as either the chairman or ranking Democrat on the Financial Services Committee next year, depending on the outcome of the election. Rep. Frank too has been sympathetic to financial interests over the years. The resignation also elevates Rep. Maxine Waters, who is currently the committee's fourth ranking Democrat.

Housing bill mark-up delayed, scheduled for July 9

Considered must legislation by the White House and the House GOP, House Financial Services Chairman Oxley, who has been masterful in moving legislation this year, has been unable to muster the votes to defeat a key Democratic amendment to the Housing Affordability Bill. The bill itself provides for lower downpayments on FHA mortgages and modest downpayment assistance to lower income families. It is not controversial. But Democrats successfully amended the bill to create a National Affordable Housing Trust Fund that would tap the entire surplus in the FHA mutual insurance fund which, in the GOP view, breaks the bank. Chairman Oxley promptly suspended the markup, and he needs to find sufficient votes to remove the provision from the bill, in order to proceed. He will try again on July 9 after canceling a session this week when it was apparent he once again lacked the votes. Ironically, it was this bill which California Congressman Gary Miller sought to amend to increase the conforming mortgage ceiling in California. Miller withdrew the amendment, however.

Connecticut failure catches regulators off-guard; pressure on BIF may result

The failure of the Connecticut Bank of Commerce surprised regulators, and, as additional sordid details emerge (large loans approved on a Sunday just three days before the bank was closed), there are now concerns that the losses to BIF could be substantial. Normally, FDIC provides an estimate of losses at the time a closure is announced, but in this case, no estimates have been provided even a week later. With BIF already below 1.24 percent, and considerable anecdotal evidence that bank deposits are increasing in the face of a plummeting stock market, the news could not have come at a worse time. In addition, Bank of Commerce has an uncommonly high amount of uninsured deposits, about $ 72 million of a total of $285 million in deposits. Many legislators feel financial regulators should make their examination ratings public. By way of comparison, Superior Bank was six times larger than Bank of Commerce and it held $67 million in uninsured deposits when it failed last year. The plight of so many uninsured depositors in Connecticut will be hard for legislators to ignore.

CBA's grassroots meetings with legislators

The following meetings have been scheduled between CBA members and their elected officials. If you would like more information on these meetings, or would like to participate in any of the meetings, please contact Mary Maybie at (916) 441-7377, ext. 207. If you are not available, please consider sending an officer from your

* Rescheduled June 21, 2002 meeting date
** Rescheduled July 9, 2002 meeting date