Academic journal article ABA Banking Journal

What the Power of Many Can Produce

Academic journal article ABA Banking Journal

What the Power of Many Can Produce

Article excerpt

The country at large may remember the 103 rd Congress mainly for the Whitewater hearings. Or maybe for NAFTA, the crime bill, or sinking the President's health-care proposal.

In banking circles, however, the 103rd will be remembered as the first Congress in recent memory to pass "clean" pro-banking legislation.

Before adjourning to hit the campaign trail on Oct. 8, Congress passed three significant and positive pieces of banking legislation. And the usual raft of quid pro quo amendments, saddling banks with onerous new requirements, was kept at bay.

As you undoubtedly know by now, the three bills passed were the Community Banking Development Act, the Riegle/Neal Interstate Banking, Branching and Efficiency Act, and the Bankruptcy Reform Act of 1994.

The first of these--detailed in last month's issue--rolled back dozens of regulatory requirements banks were spending time and money complying with.

The interstate billwcovered in this month's Briefing (page 7)--makes nationwide interstate banking possible for the first time since the McFadden Act was passed in 1927. A key feature of the new law lets each state determine its own destiny visa vis interstate branching. In fact, movements are afoot in several states to "opt out" before the branching provision takes effect in June of 1987.

The bankruptcy reform bill restores some balance to a law that fostered abuse by debtors and cost banks millions in credit losses.

We heard a banker observe recently how ironic it was that this favorable legislation occurred during a Democratic administration, whereas many of the recent negative laws were passed during Republican administrations. …

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