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Committee on Financial Services

United States House of Representatives

Oversight Plan 105th Congress


Rule X, clause 2 (d) of the Rules of the House requires each standing Committee, not later than February 15 of the first session of a Congress, to adopt an oversight plan for that Congress. The oversight plan must be submitted simultaneously to the Committee on Government Reform and Oversight and to the Committee on House Oversight.

The following agenda is the oversight plan of the Committee on Banking and Financial Services for the 105th Congress. It includes the areas in which the Committee and its Subcommittees expect to conduct oversight during this Congress, but does not preclude oversight or investigation of additional matters or programs as the need arises.

Financial Institutions / Banking Practice Issues

Financial Services Modernization. The Committee and the Subcommittee on Financial Institutions will consider efforts to modernize the financial services industry while maintaining safety and soundness. The Subcommittee on Capital Markets will review the impact of new Federal Reserve Board actions pertaining to Section 20 subsidiaries. The Capital Markets Subcommittee will also examine recent changes in the authority of banks to have subsidiaries engaged in securities underwriting activities, including the application of appropriate firewalls, and will review the market share and regulation of banks vis a vis the securities industry. (Winter/Spring/Summer 1997)

Credit Unions. The Subcommittee on Financial Institutions will consider the state of the credit union industry. Among the issues that the Subcommittee will focus on is the recent court decision that found that credit unions, by expanding their membership to include a variety of unaffiliated businesses, violated the law requiring that members share a common bond. The case has been stayed, in part, pending a determination by the U.S. Supreme Court whether to hear the case. (Winter /Spring 1997)

Interest on Small Business Checking Accounts and Interest on Sterile Reserves. The Subcommittee on Financial Institutions will consider the ramifications of current law that prohibits banks and savings associations from paying interest on checking accounts maintained by businesses. Some argue that current restrictions on these types of accounts make depository institutions less competitive in serving the financial needs of small business customers. The Subcommittee may consider whether these laws are putting U.S. depositories at a competitive disadvantage. (Summer/Fall 1997)

Interstate Banking and Branching. The Subcommittee on Financial Institutions will consider holding hearings on the implementation of the Riegle-Neal Interstate Banking and Branching Act of 1994. The Subcommittee will focus on how the Act is affecting the banking industry and consumers, especially as it relates to interstate branching, which will be permitted on June 1, 1997. (Spring 1997)

Expedited Funds Availability Act. The Subcommittees on Financial Institutions and General Oversight will review the Federal Reserve's recommendation that the Expedited Funds Availability Act be amended to give banks three days instead of two to clear local checks. The Federal Reserve believes such a change in the availability schedule is necessary to combat fraud. Consumer groups argue that the change would allow depository institutions to earn extra interest while denying customers early access to money. (Winter/Spring 1997)

Trade in Financial Services. The Subcommittee on Domestic and International Monetary Policy will review Administration's efforts in the upcoming World Trade Organization (WTO) financial services negotiations to attain open and non-discriminatory financial markets on a global scale. The Subcommittee will assess whether the WTO negotiations, based on the General Agreement on Trade in Services, secure real market access and full national treatment for U.S. financial service providers. (1997)

Money Laundering. The Committee and the Subcommittee on General Oversight will hold hearings to review private banking departments, the use of non-bank financial institutions in money laundering activities, and the implementation of money laundering laws in general. (Winter 1997 and ongoing)

Stored Value Cards. The Subcommittee on Financial Institutions may review whether Regulation E should be applied to stored value cards. (Summer 1998)

Microenterprise Lending. The Committee will review microenterprise lending initiatives, both domestically and internationally. On the domestic front, existing programs which are facilitated by the Community Development Financial Institutions Fund, the Community Reinvestment Act, and other federal programs will be studied. The Committee will investigate ways to utilize financial intermediaries, such as the Federal Home Loan Bank System, to encourage microenterprise lending. The success of microenterprise lending overseas by international financial institutions will also be a focus of Committee review. (1997)

Financial Markets / Economic Issues

Stability of Financial Markets. The Committee will review the legislative and regulatory safeguards that exist to prevent, or mitigate the impact of, a stock market crash on the U.S. financial system. The issues to be examined include the impact of bank margin and collateral requirements on the stability of the securities markets; the role of the Federal Reserve as the U.S. central bank; the ability of the settlement, clearance and payment systems to withstand a major drop in the stock market; and the impact of the internationalization of financial markets. (Winter 1998)

Economic Development Opportunities. The Subcommittee on Domestic and International Monetary Policy will review the economic development programs under the Committee's jurisdiction, including those programs administered by the Appalachian Regional Commission and the Economic Development Administration. (1997 and 1998)

The Administration's Empowerment Zone Program. The Housing Subcommittee will review HUD's Empowerment Zone and Enterprise Community designation process and the progress of the Zones. The HUD Inspector General (IG) indicated a possible violation of the HUD Reform Act of 1989 when the Secretary based selection on the "perception" of need and geographic diversity, as opposed to legal requirements for competitive criteria. (Summer 1997)

Commodity Futures Trading Commission. The Subcommittee on Capital Markets will review the adequacy of CFTC regulation of exchange trade financial derivatives and examine proposed changes in the Commodities Exchange Act, including the Treasury amendment. (Spring 1997)

Derivatives. The Subcommittee on Capital Markets will review the derivatives market, and examine the adequacy of regulation surrounding the derivatives market, risks and issues regarding the unregulated over-the-counter derivatives market, actions taken and planned by the regulators, and any need for further regulation. (Summer 1997)

Defense Production Act. The Subcommittee on Domestic and International Monetary Policy will consider the need to reauthorize the Defense Production Act, which expires on September 30, 1998. (Summer 1998)

Federal Agencies / Agency Program Issues

Economic Growth and Regulatory Paperwork Reduction Act. The Committee will review the Federal Reserve's and FTC's findings on their studies (as mandated by the 1996 Omnibus Banking Act) on the availability of sensitive consumer identification information, including social security numbers, by entities not subject to the Fair Credit Reporting Act. The 1996 Omnibus Banking Act contained a number of provisions designed to reduce regulatory burdens without sacrificing consumer protections and safety and soundness. The Committee will review how the act is being implemented with special focus on the implementation of the BIF-SAIF provisions. (Winter 1998)

Financial Institution Examinations. The Subcommittee on Financial Institutions will review last year's GAO report that found that gross disparities exist between the examinations conducted by the various federal banking regulators. The report was highly critical of the agencies' examination performance. The GAO has been asked to conduct a follow-up report. (Spring/ Summer 1997)

Management/Reform of the Federal Reserve System. The Subcommittee on Domestic and International Monetary Policy will review the operations of the Federal Reserve System, including the System's role in providing financial services, management structure and consolidation of operations, use of technology, control and oversight mechanisms, budget process, pay and benefit levels, and systemwide strategic planning. (1997 and 1998)

Community Reinvestment Act Reform (CRA). The Subcommittee on Financial Institutions will evaluate examinations of financial institutions' CRA performance under new agency guidelines. Specifically, the Subcommittee may evaluate whether examinations under the regulations are satisfactory. (Summer/Fall 1997)

Appraisal Procedures. The Housing Subcommittee will review the Federal Housing Administration's (FHA) appraisal assignments to determine whether its mortgage insurance funds are subject to unreasonable risk. Section 322 of the 1990 Cranston-Gonzalez National Affordable Housing Act directed HUD, in the course of FHA related mortgage insurance transactions, to utilize licensed and certified appraisers who meet the state licensing and certification requirements established by Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA). Subsequent FHA regulations and directives created a single registry list of appraisers available for FHA assignments. Preliminary indications from GAO and the appraisal community suggest a lack of appropriate HUD oversight. (Fall 1997)

Implementation of the Foreign Bank Supervision and Enforcement Act (FBSEA). The Subcommittee on Financial Institutions will consider whether FBSEA is being adequately implemented and whether the risk management, internal control models and enforcement of the Act are satisfactory. In May, 1997, the GAO is scheduled to release a report on the implementation of FBSEA, especially as it relates to recent scandals involving foreign bank operations in the U.S. (Summer/Fall 1997)

Flood Insurance Program - Federal Emergency Management Agency. The Housing Subcommittee will review the solvency of the National Flood Insurance Fund and the implementation of flood insurance reform legislation from the 103rd Congress. (Summer 1997)

Oversight of Agencies and The Government Performance and Results Act. The Committee and the Subcommittee on General Oversight will conduct oversight hearings to review the operations and effectiveness of the agencies, both executive branch and independent, that fall within the Committee's jurisdiction. The hearings may be broad or specific depending on the issues in need of review, and will include a review of the management of agencies as well as the implementation of legislation. Specifically, the Committee will review how agencies are implementing the Government Performance and Results Act of 1993 (GPRA), which requires the Federal government to measure its performance and report to the Congress on its results. The GPRA was signed into law in July 1993 (Public Law 103-62) and will be phased in over the next few years in all federal departments and agencies. (Spring 1997 and ongoing)

Federal Home Loan Bank System. The Subcommittee on Capital Markets will conduct a series of oversight hearings on the various components of the Federal Home Loan Bank System, including the Federal Housing Finance Board (FHFB), the Office of Finance, and the twelve Federal Home Loan Banks. Oversight of the FHFB will include a review of the quality of bank regulation. The hearing will also review recent decisions by the FHFB that have resulted in several new financing pilot projects. The FHFB's budget, staffing, and general organization will also be reviewed. Additionally, the Subcommittee will review the Office of Finance, including its budget, funding and hedging strategies.

Oversight of the Federal Home Loan Banks will also include a review of the banks' affordable housing and community investment activities, their general investment practices, and bank board composition and involvement. Additionally, the Subcommittee will be examining bank membership as well as who receives advances. (Spring/Summer 1997)

Office of Federal Housing Enterprise Oversight. The Subcommittee on Capital Markets will conduct oversight of OFHEO which will include a review of the Office's risk-based capital model, which is scheduled to be released on 3/31/97. The Subcommittee will also analyze OFHEO's examination procedures of Fannie Mae and Freddie Mac. Additionally, the Subcommittee will review OFHEO's budget, as well as its staffing and organization. (Spring/Summer 1997)

Farmer Mac. The Subcommittee on Capital Markets will review the Federal Agricultural Mortgage Corporation (Farmer Mac), including the Corporation's mission, budget, staffing, and organization. (Winter 1998)

Disaster Relief Insurance. The Committee, principally the Subcommittee on Housing, will conduct hearings on the need for Federal legislation to ensure the availability of property insurance (homeowners or other) in areas that are prone to natural disasters. (Spring 1997)

Housing Issues

Comprehensive HUD Oversight. The Housing Subcommittee will conduct a comprehensive review of the Department of Housing and Urban Development (HUD) in response to past and upcoming reports on the mismanagement and lack of core public policy mission. These hearings will review HUD's management process since the 1994 NAPA (National Academy of Public Administration) report on HUD's lack of clear legislative mandate and recommendations that HUD be dismantled if no progress is made by 1999. GAO is conducting an investigation of HUD's "high risk" designation. The HUD Inspector General (IG) continues to issue reports detailing management failures at HUD, including: 1) findings that HUD's FY95 financial statements failed to reconcile $1.9 billion in funds with the U.S. Treasurer's account; 2) violations of the HUD Reform Act of 1989 where HUD awarded $300 million in Economic Development Initiative (EDI) grants to communities on a non-competitive basis; 3) lack of necessary data and management processes; and, 4) FHA Section 203(k) investor loan defaults and fraud. (Spring 1997/Spring 1998)

FHA/HUD Mortgage Sales Initiatives and Procurement Procedures. The Housing Subcommittee will review HUD's mortgage sales program to determine whether procurement procedures were violated. The mortgage sales program is designed to sell (auction) defaulted and HUD-owned real estate mortgages to private investors. Since the program's inception, HUD has aggressively removed approximately 79,700 defaulted and HUD-owned mortgages from its books and management, with a net savings of $1.3 billion. (Spring 1997)

Real Estate Settlement Procedures Act (RESPA) and Truth In Lending Act (TILA). The Subcommittees on Financial Institutions and Housing will consider simplifying the mortgage lending process by reviewing RESPA and TILA to avoid duplicative disclosure requirements at settlement. (Spring /Summer 1997)

Comprehensive Rural Housing Service (RHS) Oversight. The Housing Subcommittee will review the Rural Housing Service's programs and administrative functions in light of a February 1996 USDA Inspector General (IG) evaluation report. The report highlights several legislative initiatives that would provide RHS with tools similar to HUD in pursuing program beneficiaries who abuse the programs. Although the 104th Congress made modest changes, the Committee will review testimony from the IG and the RHS Administrator on both legislative and administrative recommendations. (Spring 1997)

Native American Housing. The Housing Subcommittee will review Native American housing programs at HUD, in light of recent media attention to fraud and abuse. This review will also include the enactment and implementation of the Native American Housing Assistance and Self-Determination Act of 1996 (P.L. 104-330). (Winter 1998)

Troubled Public Housing Authorities and Assessments. The Housing Subcommittee will review public housing policy, particularly troubled Public Housing Authorities (PHAs), to understand and clarify federal management take-over, management agreements and local government control where there is a long-standing management and fiscal problem. Included in this review is the reliability of PHMAP (Public Housing Management Assessment Program), which measures the performance of PHAs and where, in some cases, possible fraudulent practices (including destruction of official government records) and violations to HUD policy skewed the authority assessment and precluded "troubled" designations. (Winter 1997 and 1998)

Low Income Housing Tax Credit (LIHTC). The Housing Subcommittee will review the effectiveness of the Low Income Housing Tax Credit (LIHTC), with the Committee on Ways and Means Subcommittee on Oversight, and consideration of issues such as permanent authorization vs. intermittent authorization sunsets; LIHTC impact of very-low and low-income families; and, federal and state monitoring of the LIHTC program. (Spring 1997)

Fannie Mae and Freddie Mac. The Subcommittee on Capital Markets will examine the affordable housing goals of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) and their responses to those goals. Additionally, the Subcommittee will review Fannie and Freddie's capital adequacy. (Spring/Summer 1997)

Community Development Block Grant Program. The Subcommittee on Housing will review the Community Development Block Grant (CDBG) program and its effectiveness in providing economic opportunity for communities, especially economically distressed areas. The Subcommittee is interested in the program's use of Federal funds to provide or lure businesses and jobs at the expense of other jurisdictions and whether those funds are used appropriately. (Summer 1997)

Monetary Policy Issues

Federal Reserve's Conduct/Implementation of Monetary Policy. The Subcommittee on Domestic and International Monetary Policy will hold hearings on the Federal Reserve Board semi-annual reports on the conduct of the nation's monetary policy. The Humphrey-Hawkins Act requires these reports no later than February 20 and July 20 of each year. (Winter and Summer of 1997 and 1998)

European Monetary Union. The Subcommittee on Domestic and International Monetary Policy will examine the impact of the European Monetary Union, scheduled for 1999, on U.S. international economic interests and the world economy. (1997 and 1998)

Currency Issues

Activities of the Bureau of the Mint and Bureau of Engraving and Printing. The Subcommittee on Domestic and International Monetary Policy will review the activities of these Treasury bureaus as they relate to the printing and production of U.S. currency and coins. The efficiency and productivity of Mint and BEP manufacturing operations will be reviewed. The financing and minting of commemorative coins, including a circulating commemorative coin, will also be studied. In addition, the cost/benefit of replacing the one dollar bill with a one dollar coin will be reviewed. (Spring 1997 and 1998)

Counterfeiting. The Committee, principally the Subcommittees on Domestic and International Monetary Policy and General Oversight, will review the Administration's efforts in detecting and combating the counterfeiting of U.S. currency in the U.S. and abroad, including the Treasury Department's redesign of U.S. currency in order to deter counterfeiting. (1997 and 1998)

Payment System. The Committee will review the payment clearance and settlement systems as a follow up to the Committee's request last year that the GAO review issues surrounding the systems, including their efficiency and stability. (Summer/Winter 1997)

Future of Money: Electronic Money and Payment Systems. The Subcommittee on Domestic and International Monetary Policy will assess the domestic and international implications of new innovations in electronic money and electronic payment systems. Among the issues the Subcommittee will examine are soundness, security, privacy, and access to new electronic payment methods, who will be permitted to issue new payment methods, competing government regulation, threats posed to critical infrastructures such as the payment system, and the impact of the "year 2000" computer issue on bank information systems. (1997 and 1998)

Reports of Inspectors General or Investigative Reports. The Subcommittee on General Oversight will hold periodic hearings to review the findings of investigations conducted by the General Accounting Office ("GAO") and the Inspectors General of agencies that fall within the Committee's oversight jurisdiction. For example, the Subcommittee intends to review with the GAO its findings regarding the effectiveness of efforts by the Department of the Treasury to combat international counterfeiting of U.S. currency. (Spring 1997 and ongoing)

International Lending Issues

Assets of Holocaust Victims/Nazi gold. The Committee will continue to monitor and, as appropriate, hold hearings on the progress of the Administration, Swiss authorities and the two historical commissions in resolving the questions surrounding the disposition of Holocaust victims' assets deposited in Swiss banks and of the gold acquired by the Swiss central bank during World War II. (1997 and 1998 as needed)

Reauthorization of the Export-Import Bank. The Subcommittee on Domestic and International Monetary Policy will review the merits of extending the authority of the Export-Import Bank and other export financing programs. The authority for the operations of the Export-Import Bank expires on September 30, 1997. (Spring 1997)

U.S. Participation in International Financial Institutions. The Subcommittee on Domestic and International Monetary Policy will review U.S. participation in the International Monetary Fund, World Bank Group, Inter-American Development Bank, Asian Development Bank, African Development Bank, European Bank for Reconstruction and Development, Middle East Development Bank, and the North American Development Bank.

Highlights of the U.S. Treasury Department's likely authorization requests to the Banking Committee includes $3.8 billion for U.S. participation in the IMF's "New Arrangement to Borrow," and $1.6 billion for the World Bank's International Development Association. Additional authorization requests for the IMF and regional development banks are likely. (Spring 1997 and 1998)

International Lending Mechanisms. The Subcommittee on General Oversight intends to review the use of domestic and international lending mechanisms to stabilize international monetary developments, such as the Exchange Stabilization Fund. (Summer 1997)


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