1
published 2000
DVD Video Video
2
3
6
by CTION ON LEGISLATION FSC, ETI Tax Break Repeal S *1637-, HR *2896-, HR 4520 The House voted 251 to 178 on June 17 in favor of a sweeping bill that would establish $155 billion of corporate tax breaks, including $1.3 billion of savings for S corporations. The bill must be reconciled with a corporate tax measure the Senate approved in May. The House bill, which was designed to repeal certain U.S. breaks the World Trade Organization had ruled illegal export subsidies, contains 11 provisions that would benefit S corporations or make it easier for banks to convert to the tax-advantaged firms. For instance, it would increase the maximum number of shareholders by a third, to 100, 2002. It would also eliminate a controversial depreciation deduction that banks and other companies earn by buying used subway cars, sewer systems, and other utilities and leasing them back to the original owner through so-called sale-in, lease out deals. The deduction would remain for deals of five years or less. The Senate on May 11 voted 92 to 5 to approve a similar measure, the Jobs Act (for Jumpstart Our Business Strength). The bill, sponsored by Finance Committee Chairman Charles Grassley, R-Iowa, would retroactively repeal the deduction for foreign sale-in, lease out deals and for domestic ones signed after Nov. 18, 2003. Like the House bill, the Senate bill would preserve the tax benefit for leases on new equipment such as aircraft. However, its grandfather provision would apply to leases signed by Sept. 17, D-Calif., R-Tex. Flood Insurance Public Law No. 108-264 President Bush has reauthorized the Federal Emergency Management Agency's National Flood Insurance Program through 2008. The 36-year-old program, which was to expire June 30, including annual customer privacy notices, disclosures of community reinvestment-related spending, and the three-day waiting period for mortgages. He and 18 other regulators, industry officials, consumer advocates, and lawmakers produced wide-ranging lists of regulations they would like relaxed or eliminated in a bill Sen. Mike Crapo, R-Idaho, is drafting. Mr. Reich's suggestions were significant because Sen. Crapo had said in an interview that the FDIC's deregulatory efforts may serve as a blueprint for the bill, R-W.Va., that, among other things, would let banks and thrifts pay interest on business checking accounts, expand more easily across state lines, and be examined less frequently. Thrifts could also make more auto, commercial, *2003-, and are owned by companies. It is unclear how Sen. Crapo would handle the ILC issue. PENDING LEGISLATION GSEs S *1656-, because investors perceive them to be backed by the government, action could be stalled until next year on a bill that would create a stand-alone regulator for Fannie, Freddie, and the Federal Home Loan banks. In an interview May 24, House Financial Services Committee Chairman Michael G. Oxley did not put the legislation on his priority list. He said he had been interested in pursuing a bill, but he blamed the Bush administration's broad reform demands for stalling it. The Bush administration continues to talk tough on GSE matters. Under fire from Democrats, R-Ala., SJ Res. 32, HR *4236-, which took effect in February, exempt national banks from a number of state laws on lending and deposit taking, as well as state enforcement actions. The Senate measures, sponsored by Sen. John Edwards, D-N.C., the Senate has until the end of the session to act under the regular rules. Sen. Edwards' bill has two co-sponsors: Sens. Barbara Boxer, D-Calif., and Richard Durbin, D-Ill. The House bills are sponsored by Rep. Luis Gutierrez, D-Ill., and 33 co-sponsors, including four Republicans: Reps. Ron Paul of Texas, Roscoe Bartlett of Maryland, Otter of Idaho, and Scott McInnis of Colorado. Disapproval resolutions do not get expedited status in the House. Deposit Insurance S 229, HR 522 The Independent Community Bankers of America in June publicly dropped its demand that deposit insurance coverage immediately be raised above $100, 000 for general accounts. Instead, sponsored by Rep. Spencer Bachus, R-Ala., in a 411-to-11 vote April 2, 2003. It would increase coverage to $130, 000 for general accounts and $260, 000 for retirement accounts, merge the bank and thrift deposit insurance funds, give the FDIC. more flexibility in charging premiums, D-S.D., and Chuck Hagel, R-Neb. Senate Banking Chairman Richard Shelby, R-Ala., who opposes increasing coverage, floated a proposal in January that would occasionally raise coverage based on an index. But several Senate Banking members want to raise coverage immediately, at least for retirement accounts. As a result there is a stalemate in the committee over the bill, the Senate is expected to have one of its own soon. Rep. Sam Johnson, R-Tex., offered the House bill on June 25. Sen. Craig Thomas, R-Wyo., plans to offer a companion measure shortly. The Retirement Savings Account Act, a Bush administration initiative, would consolidate the three types of IRAs into a single account. Taxpayers of all income levels could make $5, 000 of after-tax contributions annually. Earnings would be tax-free
Published in American Banker (2004)
Get additional information online
E-Article
7
by CTION ON LEGISLATION FSC, ETI Tax Break Repeal S *1637-, HR *2896-, which contains a number of new corporate tax breaks, 2002. It also would do away with a controversial depreciation deduction banks and other companies earned by buying used subway cars, sewer systems, and other utilities and leasing them back to the original owner through so-called sale-in, lease-out deals. The bill would exempt short-term Silo deals of five years or less from the new rules, the Jobs Act (for Jumpstart Our Business Strength). The bill, sponsored by Finance Committee Chairman Charles Grassley, R-Iowa, would retroactively repeal the deduction for foreign Silo deals and for domestic ones signed after Nov. 18, 2003. Like the House bill, the Senate bill would preserve the tax benefit for leases on new equipment such as aircraft. However, its grandfather provision would apply to leases signed by Sept. 17, 2003. Down-Payment Assistance H.R. 3755 The House Financial Services Committee approved the Zero Downpayment Act on a voice vote June 3. The bill, sponsored by Rep. Patrick Tiberi, R-Ohio, would eliminate the down-payment requirement for people who buy homes with Federal Housing Administration-insured mortgages. NEW LEGISLATION Credit Card Disclosures S. 2475 Sen. Daniel Akaka, D-Hawaii, The statement would also have to provide information on how many years and months (and how much interest) it would take to pay the balance by making only minimum payments, and a toll-free phone number customers could call to get information about credit counseling and debt management services. PENDING LEGISLATION GSEs S *1656-, HR 2575 Action is increasingly unlikely this year on a bill that would create a stand-alone regulator for Fannie Mae, Freddie Mac, and the Federal Home Loan banks. The issue could even be stalled next year. In an interview May 24, House Financial Services Committee Chairman Michael G. Oxley did not put the legislation on his priority list. He said he had been interested in pursuing a bill, Honestly, I don't think they wanted a bill in the first place for whatever reason, They have decided they are going to go the regulatory route. Having been around here for 23 years, I finally reached the point where I just thought it was such a moving target, Meanwhile, many House Republicans have expressed dismay at the Department of Housing and Urban Development's proposal to increase affordable housing goals for Fannie and Freddie. At a hearing May 20, several GOP lawmakers told HUD Secretary Alphonso Jackson that some of the goals were unrealistically high. Sen. Wayne Allard, R-Colo., will be in the next Congress, if anything happens at all, but he stressed that the matter will remain a priority. He also said he expects the Senate Banking Committee to hold more hearings on the issue this year, of the government-sponsored enterprises in a financial crisis. That issue was one of the reasons Senate Banking Chairman Richard Shelby's bill failed to gain much bipartisan support, by Sen. Robert Bennett, R-Utah, the Treasury's under secretary for domestic finance, had the authority to act, and that it was not trying to play politics with the issue. In addition to the affordable housing proposal, HUD is scrutinizing certain activities, including Fannie's international consulting business, to see whether they fall outside the GSE charter. Most observers say that only a GSE crisis could lead to enactment this year. The bill from Sen. Shelby, R-Ala., would let the regulator raise minimum and risk-based capital requirements and oversee the safety and soundness and the housing mission of the GSEs. It would be run by an executive director, who would be chosen by the President and approved by the Senate for a six-year term. The executive director would be advised by a board that would include the Treasury secretary, the HUD secretary, thrifts, and credit unions. Sen. Michael Crapo, R-Idaho, is drafting a deregulatory bill that is expected to be introduced soon. On the other side of the Capitol, the House voted 392 to 25 on March 18 to approve a deregulatory bill, sponsored by Rep. Shelley Moore Capito, R-W.Va., that, among other things, would let banks and thrifts pay interest on business checking accounts, expand more easily across state lines, and be examined less frequently. Thrifts could also make more auto, commercial, *2003-, and are owned by companies that derive 85% or more of their revenue from financial services. Deposit Insurance S 229, HR 522 The Independent Community Bankers of America in June publicly dropped its demand that deposit insurance coverage immediately be raised above $100, 000 for general accounts. Instead, sponsored by Rep. Spencer Bachus, R-Ala., in a 411-to-11 vote April 2, 2003. It would increase coverage to $130, 000 for general accounts and $260, 000 for retirement accounts, merge the bank and thrift deposit insurance funds, give the Federal Deposit Insurance Corp. more flexibility in charging premiums, D-S.D., and Chuck Hagel, R-Neb. Senate Banking Chairman Richard Shelby, R-Ala., who opposes increasing coverage, floated a proposal in January that would occasionally raise coverage based on an index. But several Senate Banking members want to raise coverage immediately, at least for retirement accounts. As a result there is a stalemate in the committee over the bill, and it is not clear if the ICBA's new position will spark a compromise. Disapproval Resolutions SJ Res. 31, SJ Res. 32, HR *3808-, which took effect in February, exempt national banks from a number of state laws on lending and deposit-taking practices, as well as enforcement actions. The Senate measures, sponsored by Sen. John Edwards, D-N.C., the Senate has until the end of the session to act under the regular rules. Sen. Edwards' bill has two co-sponsors: Sens. Barbara Boxer, D-Calif., and Richard Durbin, D-Ill. The House bills are sponsored by Rep. Luis Gutierrez, D-Ill., and 29 co-sponsors, including three Republicans: Reps. Ron Paul of Texas, Roscoe Bartlett of Maryland, Otter of Idaho. Disapproval resolutions do not get expedited status in the House. In a hearing held April 7 on the OCC's regulations, the Senate Banking Committee took testimony from Comptroller of the Currency John D. Hawke Jr., state regulators, HR 253 Legislation that would reauthorize the federal flood insurance program remained stalled at press time on Wednesday, as Senate Banking Committee leaders continued to try to reach an agreement with Sen. Mary Landrieu, D-La., who has been blocking the measure over local concerns. The bill, sponsored by Sen. Jim Bunning, R-Ky., sponsored by Rep. Doug Bereuter, R-Neb., 352 to 67. The flood insurance program, which provides $26 billion of coverage to U.S. homeowners
Published in American Banker (2004)
Get additional information online
E-Article