Spencer Bachus

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, I was unavoidably detained during rollcall 568. Had I been present I would have voted ``yea.''

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, I rise in support of the rule. Let me say that there have been several newspaper articles lately dealing with these side agreements that we had under NAFTA and China, NTPR, and the two fast tracks. And, in fact, here is one in a newspaper yesterday after the side agreement that we made on textiles. It said, The nonprofit Public Citizen reviewed past trade votes and found that 89 percent of the side deals affecting trade policy were broken. Never enacted. And, in fact, I got that information, and it is about a 40-page attachment with all the broken side agreements. Very sobering to read. Promises made in the midst of negotiations, then promises broken. But let me just say this, and I want to be positive here. These are the trade agreements, these are the side agreements that President Bush made, and although there have been almost 89 broken agreements, President Clinton, of all the ones he has made, 3 of the over 80 have been by President Bush. The vast majority of the side agreements that President Bush has made he has kept, and they are on the books today. So is there a difference between this and past agreements? I think the difference is that we have a President who has honored his side agreements in the past 3 or 4 years and will honor them again. That is his track record. He has made side agreements, and the vast majority of those he has abided by. As we talk about these side agreements, and I will just say that here it says, ``Democrats opposing CAFTA have warned colleagues about last- minute promises in exchange for votes. `Side letters and so-called side agreements promised are not worth the paper they are written on,' said Sherrod Brown, Democrat of Ohio, Jan Schakowsky, Democrat of Illinois.'' There is a lot of truth to that. There is a record of broken side agreements, but not by President Bush. The Business Week says, ``Signed, sealed and undelivered. The history of broken side agreements.'' That was in the paper about CAFTA. Again, I will say to you, this President has honored his agreements.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, I rise today to recognize an individual whose tireless dedication to service is continuing to impact the lives of countless Alabama schoolchildren. Over his thirty-four year teaching career, Mr. Danny Goggins came to embody the true nature of a selfless public servant. His career began by teaching history at Helena Elementary, and he rapidly rose through the ranks to become a High School principal at the young age of thirty-one. The positive and lasting impression that he made on countless people is best known in the growing town of Calera, Alabama. For over two decades, Danny Goggins served as the Principal of Calera High School in Shelby County. In fact, it was not a rare occasion for him to have awarded diplomas to the parents of some of Calera High's most recent graduates. Mr. Goggins' teaching philosophy was based on knowing that many of his students came from hard-working families not unlike the one he was raised in, and he felt that it was his responsibility to see that Calera's children had the same opportunity to learn as students in much wealthier schools. He accomplished this difficult task by continually hiring quality teachers and by maintaining a positive learning environment. Through his efforts, Calera High School consistently produced the most improved standardized testing scores in Shelby County, and also won several state championships in mathematics and boy's basketball along the way. He was respected by both his students and teachers because they knew him to be a fair and impartial administrator who would address issues with common sense solutions. In fact, many of his former students often see him out and make it a point to say hello or remind him about the time they had to visit his office for one reason or another. In the end however, I believe the real reason people feel compelled to speak is because they remember him for treating them fairly and as an adult, regardless of who they were. It is Mr. Goggins belief that everyone has an equal chance at success if they behave with a positive attitude and demonstrate the character needed to succeed. Prior to his retirement in the fall of 2004, Mr. Goggins' proudest moment as an educator came when he had the personal satisfaction of awarding a diploma to his youngest son, who graduated with top honors from Calera in 2003. Today, Danny Goggins continues to educate younger generations by serving as the Scout Master for Boy Scout Troop 548 in Alabaster, a post he has held since 1972. It has been my pleasure to recognize a distinguished Alabamian such as Mr. Goggins, who has asked for nothing in return for service to so many.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, I move to suspend the rules and agree to the bill (H.R. 1042) to amend the Federal Credit Union Act to clarify the definition of net worth under certain circumstances for purposes of the prompt corrective action authority of the National Credit Union Administration Board, and for other purposes.

Mr. BACHUS. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 1042.

Mr. BACHUS. Madam Speaker, I yield myself such time as I may consume, and let me simply conclude by saying that when the NCUA seeks a healthy credit union, or when there is a troubled credit union and the NCUA seeks a healthy credit union to rescue it through merger, the pooling of potential White Knights is presently limited because of the present interpretation. And as they have said, ``They are limited by the prospect of a significant postmerger reduction in capital for the acquiring credit union under the present interpretation, if the FASB rule goes forward without this legislation.'' It goes on to say, NCUA, that ``this will inevitably make NCUA-assisted mergers more difficult to execute, resulting in more credit union failures and a higher cost to the National Credit Union's Share Insurance Fund, which insures the deposits to credit union members.'' So I conclude by saying that for this reason, among others, not only the NCUA but also the National Association of Federal Credit Unions, NAFCU, and the Credit Union National Association, CUNA, strongly support this legislation to ensure an accurate depiction of net worth in credit union mergers and to avoid creating unintended obstacles to mergers that would otherwise benefit credit union members. In addition, FASB has stated that, while it does not take positions on public policy initiatives unless they could impair the mission and independence of FASB, it believes H.R. 1042, and I quote, ``does not propose to establish or change general purpose standards of financial accounting and reporting and, therefore, has no impact on the standard- setting activities of FASB.'' I would like to again thank, and I will name as I close, the cosponsors of this legislation: Introduced by the gentleman from Vermont (Mr. Sanders), myself, the gentlewoman from Florida (Ms. Ginny Brown-Waite), the gentleman from Florida (Mr. Feeney), the gentlewoman from Oregon (Ms. Hooley), the gentlewoman from New York (Mrs. Kelly), the gentlewoman from New York (Mrs. Maloney), the gentleman from Kansas (Mr. Moore), the gentleman from Texas (Mr. Paul), the gentleman from California (Mr. Royce), the gentleman from California (Mr. Sherman), the gentleman from Michigan (Mr. Camp), the gentleman from Illinois (Mr. Gutierrez), the gentleman from Pennsylvania (Mr. Kanjorski), the gentleman from Ohio (Mr. LaTourette), the gentlewoman from New York (Mrs. McCarthy), the gentleman from Ohio (Mr. Ney), the gentleman from Arizona (Mr. Renzi), and as I said, the main cosponsor, ranking member of the committee, the gentleman from Vermont (Mr. Sanders). So that, I think, illustrates not only what the gentleman from California (Mr. Sherman) said, that there is no opposition to this legislation, but also the strong bipartisan support that this has across this Congress. Madam Speaker, I submit for the Record herewith the various documents referred to throughout my remarks:

Mr. BACHUS. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, I rise in strong support of this legislation, H.R. 1042, the Net Worth Amendment for Credit Unions Act, which I and the gentleman from Vermont (Mr. Sanders), the ranking member, introduced along with 16 other cosponsors, evenly divided between Republicans and Democrats, including ranking members of both committees. It is a so-called technical amendment, but it is also a very important piece of legislation designed to address the potentially harmful and unintended consequences of the recently proposed FASB accounting rules of mergers of financial institutions and, in particular, credit unions. Because this new accounting rule is expected to become effective early next year, it will impact, going forward, credit union mergers, and it is essential that we have in place H.R. 1042 prior to that time. This legislation has been endorsed by FASB. It has the endorsement of the Federal credit union regulators. I had testimony which I would like to introduce from NCUA chairman Joanne Johnson who testified before the Committee on Financial Services this past Thursday in strong support of this legislation. In fact, she said without this legislation, it would be hard to, in cases of mergers, provide the safest, most efficient and most beneficial mergers to the benefit of credit union consumers, and she says this legislation is essential for credit union consumers and for their protection. It has no opposition that I know of. As far as explaining the rule, I am going to submit in its entirety two different pieces on actually what the issue is, what the solution is. The solution is 1042, and then I would like to introduce this two-page summary. Let me briefly try to very briefly state what this does. Under the current FASB rule, credit unions are able to use the pooling of interests method of accounting for mergers; however, the new rule will require use of the purchase method. In doing that, they did not anticipate the current definitions in the National Credit Union Act. Under the new approach that FASB will be instituting, an institution is not permitted to bring over the retained earnings of the acquired institution onto its own balance sheet as retained earnings, but rather as acquired equity. Thus, the surviving institution, the institution which is taking the other institution into its corporate being, would not be able to count the retained earnings of the merged institution in its net worth for purposes of prompt corrective action purposes under the Federal Credit Union Act. And the Prompt Corrective Action, as those of us on Committee on Financial Services know, is the mechanism to bring credit unions into compliance as far as safety and soundness. This change, therefore, would have the unintended effect of lowering the merged credit union's net worth category classification. We have taken testimony of Board members of FASB who say this was not their intent; and as I said, they are in favor of the current legislation. So the practical effect of FASB's directive changing the accounting treatment of credit union mergers from the pooling method to the purchase method are perhaps illustrated by a simple hypothetical. Under the pooling method previously used to account for a combination of two credit unions, if a credit union with $2 million in retained earnings merged with a credit union with $2 million in retained earnings, the surviving credit union would have $4 million in retained earnings, simply, two plus two equals four, which counted as its net worth for purposes of applying the Prompt Corrective Action capital requirements outlined above. However, under the new purchase method of accounting mandated by the new FASB rule, if a credit union with $2 million in retained earnings merges with another credit union with $2 million in retained earnings, the surviving credit union would only have $2 million in retained earnings, not a result that makes any sense, and our legislation simply preserves the two plus two equals four. As I say, Madam Speaker, the legislation simply amends the Federal Credit Union Act's definition of net worth to include retained earnings of both credit unions that merge in the net worth of the credit union that continues after the transaction. Failure to make this statutory change will create major disincentives to otherwise merged credit unions. We took testimony last week from George Reynolds, Senior Deputy Commissioner of the Georgia Department of Banking and Finance, and I would like to include his statement, but what he and others have pointed out to the committee is that oftentimes, whether it be a bank or a thrift or a credit union, if you have one credit union that is sound and one that may be in need of corrective action, one of the alternatives is to merge the weaker institution into a stronger institution for the protection of the members of that credit union. The NCUA, and also the different State commissioners of banking and bank supervisors, and credit union supervisors had not been able to do this because of the anticipation of the FASB rules. It has resulted in a lot of hesitancy in merging these institutions and, in many cases, is slowing corrective action because of this. So failure to make the statutory change will, as I say, create major disincentives. A credit union seeking to merge with another union institution would be faced, in many situations, with a marked decline in its capital for PCA purposes once the merger went through, giving rise to a supervisory intervention by the NCUA designed to limit its growth and restore its now depleted capital to acceptable levels when actually there would have been no depletion of capital at all. Madam Speaker, I reserve the balance of my time.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, I recently had the opportunity to meet with the senior operating officials of nearly all of the Nation's freight railroads, large and small. What I heard from them, each of them, was their continued commitment to the safe and secure transportation of all goods tendered to them in interstate commerce. I also heard their concern about being caught in the middle of a political crossfire over the issue of transporting certain hazardous materials through major cities located along their rail lines. They find themselves in this untenable position because of a legal duty. The common carrier obligation requires them to accept all legal goods for transport. Despite this legal duty and with no regard for the vital role some of these commodities play in protecting the public health and welfare, there are communities like the District of Columbia that are using every resource at their disposal to prevent railroads from going through their towns with these goods; in particular, hazardous materials. Railroads clearly are the safest means of transporting hazardous materials, with a 99.996 percent safety record. These materials include chlorine to clean your water and propane to heat your homes. The transportation of the most hazardous chemicals represent three-tenths of one percent of the railroads' annual revenue, but well over 50 percent of their insurance premiums. But the railroads are not allowed to get out of the business. And if they did, the transportation of these goods would be much less safe. That is why I urge my colleagues to oppose local initiatives such as those enacted by the District of Columbia and now being contemplated by other cities, like Cleveland, Philadelphia, Pittsburgh, Baltimore and Atlanta, in trying to prohibit the routing of these goods through their cities. The Constitution vests the Federal Government with the responsibility for regulating interstate commerce (Article I, Section 8). Through (among others) the Federal Railroad Safety Act, the Hazardous Materials Transportation Act, and ICCTA, Congress has given Federal agencies the responsibility to oversee the transportation of hazardous materials in interstate commerce. Further, in the case of DC, the Department of Homeland Security is actively analyzing rail security matters, particularly hazmat transportation (e.g., through the DC Rail Corridor Project's vulnerability assessment, and an analysis of security of hazmats that pose a toxic inhalation hazard). What the DC Council has done, and what other cities are threatening to do, not only usurps the responsibilities and actions of the Federal Government, but also actually increases the risks of hazmat transportation, by increasing transit time and distance due to rerouting, and by shifting the risk involved with hazmat transport to other areas of the country. Rerouting trains carrying hazardous materials will cause delays, idling of hazmat containers, and switching of containers to other trains. Each handling of hazmat containers raises the risk level. In sum, the re-routing potentially threatens national security, disrupts interstate commerce, and jeopardizes public health. We should be constantly vigilant about our national security. Thus, we cannot let the misguided efforts of myopic municipalities compromise our Nation's health, economy, safety and security through punitive and ill-advised legislation, such as that passed by the District of Columbia.

Mr. BACHUS

Mr. BACHUS. I yield to the gentleman from Ohio.

Mr. BACHUS. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, there are several things about this bill that I am not sure have been discussed or are as widely known by the Members, but the first thing I would say is that the legislation is supported by all the federal bank regulators. It is also supported by all the industry groups. And it does several things. It addresses inefficiencies in the present system and deficiencies in the present system. As far as deficiencies in the present system, one of the greatest is the fact that we have two different funds. The Savings Association Insurance Fund and the Bank Insurance Fund. All the Federal regulators have recommended combining those funds from the administrative cost savings and also because we do not want a situation where some of our institutions are paying certain basis points where others are not. We want more equity there so it gives no advantage for our thrifts over our banks or our banks over our thrifts. Another problem we have had increasingly is the problem of free riders. Since 1996, there have been no assessments of the banks for the Federal insurance, and as a result of that, we have had several large brokerage firms which have never paid into the fund, and what they are doing is setting up affiliate banks, six or eight or nine affiliate banks, and they are advertising $800,000 or $900,000 worth of federally insured deposits. In other words, people can deposit $800,000 or $900,000 into to their fund, and it is federally insured. This really is an inequity because they have never paid into the system and they are offering that something that smaller banks and other banks that do not set up these affiliates or string of affiliates and can only offer $100,000 of coverage; and, in fact, those banks or thrifts that are only offering $100,000 worth of coverage are actually paying and have paid for coverage for some of the large brokerage firms. And the Federal Reserve, the FDIC, and the industry have said that this ought to be corrected, and we do that in this bill. We do that in two ways. One is by requiring that everyone pay a minimum amount; number two, we increase the coverage; and number three, we allow more flexibility in when the premiums are charged. Right now when the bank reserves fall below 1.25 percent, the Federal Reserve actually has to start charging a premium, and then if the situation is not rectified within a year, they have to then start charging 23 basis points, and they have little discretion in this matter. The bank regulators and the industry have recommended that what we do as opposed to having a hard number that we give a range, or a discretionary range, and we have done that at 1.15 to 1.4. What this allows to happen is, if we think about it, there are no premiums being charged, and then all of a sudden we go into a recession and we start charging a premium, or 23 basis points, it actually can worsen the recession, and at the time when banks ought to be lending money, suddenly they are having to pay these premiums. The time to fund the insurance program and the insurance reserve is in good times. So what we have done in this bill is allow them to build up a reserve in the good times, and then when we come into a recessionary period and bank reserves start dropping, they have some discretion in not instituting a 23-basis-point charge on the banks. And policymakers and all the Federal bank regulators believe that this will not only strengthen the funds, but it will take away a bias against a down cycle that could actually make a down economic cycle worse. One of the things that is being debated, and the gentleman I am going to yield to next is going to be in opposition to the coverage increase, is the coverage increase. When we consider increasing the coverage, there have been two arguments against that. One was a ``moral hazard'' argument. The FDIC, in response to some people saying that if we raise the coverage, it will be a moral hazard, actually commissioned a study and appointed the vice chairman of the Federal Reserve, Alan Blinder, as the chairman of that study commission, and they came back and said because these are risk-based premiums, there is absolutely no validity to the moral hazard argument. If we think about it this way, what this is, is an insurance, and bank depositors pay a premium on their deposits for insurance coverage. And to argue that if that coverage is increased from $100,000 to $130,000 suddenly would cause reckless behavior, it would almost be like arguing that if I had automobile insurance and I had $100,000 worth of automobile insurance on my automobile, and I raised that to $200,000 of insurance coverage that I would suddenly start driving more recklessly or be more prone to have accidents, and we know that when people insure, whether it is a deposit, an automobile, or a home, they are not any more apt to act in a reckless nature. So that argument has been shot down pretty uniformly. A second argument against it is that we do not need to increase it. But one of our last bank failures was a bank in Chicago, a medium-sized bank. And what we found, because we had not raised the coverage levels above $100,000 since 1980, we found over 700 customers of that bank lost a substantial amount of their deposits, and the reason they did that, if we think about what depositors do, we had several hundred of them that had an IRA account with that bank, and they had an IRA that was over $100,000, and they basically lost everything above $100,000. And one lady that was quoted in the Chicago Tribune said, The loss I sustained is going to be the difference between my having a retirement where I will not have to struggle, and now, basically having a bare bones retirement where I will have to struggle to make ends meet. We have another situation that we talked about in committee, and that was the fact that today many people are selling and buying houses, and when they do, they put the proceeds of that sale or the purchase price for that sale in a bank account. In 1980 the average price of a home was around $100,000. Today it is several times that amount. So imagine that if one is closing on a house, they sell their house, they get a $400,000 or $300,000 check or even a $200,000 check for that house, and most Americans put their savings in a house, they go down to their bank and they deposit that check and the bank happens to fail. And every once in a while, a bank does fail like the one in Chicago. In that case, they had 12 people that had deposited the proceeds from the sale of their homes in the weeks before and they lost all of that money above $100,000. Some would say and some have said in opposing coverage increase that what Americans ought to do is when they sell a home, if they sell a home for $300,000, they ought to ask the closing attorney to write three $100,000 checks and they ought to deposit that in three different banks, or, if they are going to purchase a house, they ought to go to three different institutions and deposit that money in three different institutions, and then when they show up at the closing, they ought to write three different checks. We know as a practical matter, Mr. Chairman, that people are not going to do that, and we should not ask them to do that. What we ought to do is raise coverage levels to reflect realities today. The last time that coverage was increased in 1980, if we increased it for inflation today, it would be well over $180,000. Instead, we are only increasing it to $100,000 as a compromise. If we went back to not 1980 but we went back to 1974, which was the time before that that it was increased $40,000, and if we had adjusted it in 1980, it would be over $200,000. If we disregarded that increase and went back to 1974, it would be $180,000. So we are actually playing catchup here, and we have used that smaller number in an attempt to compromise with those who objected to increasing it at all. I will say this: This bill passed with 111 votes the first time it was up, I think, but, anyway, I will get those statistics later, but I think it had 18 ``no'' votes the first time, 11 ``no'' votes the second time. Mr. Chairman, I reserve the balance of my time.

Mr. BACHUS. Mr. Chairman, I yield 5 minutes to the gentleman from California (Mr. Rohrabacher), who is in opposition to the bill.

Mr. BACHUS. Mr. Chairman, I had one glaring oversight in this entire debate concerning the bill. And that is the fact that the gentlewoman from Oregon (Ms. Hooley) who really played a monumental part in this legislation over the past 2 or 3 years and actually was the original cosponsor of this legislation has not been recognized. I would like to commend her for her fine work on this bill. And I guess it is a credit to her and her personality, despite that oversight she did not call attention to my omission. And so I commend the gentlewoman from Oregon (Ms. Hooley). She is an outstanding Member of this body. And in this legislation, she deserves a lot of credit for its passage and its support.

Mr. BACHUS. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, one thing the gentleman from California (Mr. Rohrabacher) mentioned and I would like to say in his defense: he has triplets at home, so I think we ought to have a lot of patience for the gentleman. They are very young. One- year-old triplets.

Mr. BACHUS. I yield to the gentleman from Massachusetts.

Mr. BACHUS. Mr. Chairman, I yield such time as he may consume to the gentleman from Ohio (Mr. Gillmor).

Mr. BACHUS. Mr. Chairman, I yield myself all remaining time. There are several things I think we need to say to correct the record. One was it was said by the gentleman in opposition that this was taxpayer guaranteed; and, in fact, these deposits are insured not by the taxpayer, but by the BIF and SAIF funds; and it is the depository that insures his own accounts. And for the taxpayer to pay one red cent, all assets of every federally insured financial institution would have to be exhausted before the taxpayer would have to pay one cent. In other words, all the assets of all of the federally insured banks and savings associations would have to be paid. And in that regard, I am sure the gentleman from California would agree that if that moment ever came, we would be, we would probably be in dire straights, and I certainly never anticipate that happening. It has never happened in the history of our country. The savings and loans were exhausted, not the banks. The BIF account has never been exhausted; the savings and loan account thing was exhausted because of failures of savings and loans. And if we say, as the gentleman said, that the reason why all the savings and loans failed is because we increased coverage from $100,000 to $130,000, we did that for the banks and the credit unions at the same time. No credit unions failed; very few banks failed. In some States, no institutions failed, where in States like California, Texas, where you had weak regulation, weak oversight, several failed; or you had the oil patch in Texas where many of them failed. In fact, the cost to the taxpayer would have been greater had the first $100,000 of accounts not been insured. It would have been a much greater loss. Thank goodness the first $100,000 of accounts were insured. If we had another failure today, $130,000 would be insured, and we would have insurance for it. So to say that insurance coverage is taxpayer funded, the taxpayer is not funding this. If the taxpayer were funding it, his analogy would be right. And the last thing that he says, and he has said this, is that this was the cause of the savings and loans to fail. This has been looked at by this Congress, it has been looked at by the FDIC, it has been looked at by the Federal Reserve and, actually, I am going to introduce this. This is about 20 different reasons that government reports have causes for the failures of the S&Ls; and on that list of 20, nowhere does it say because of an increase in coverage. In fact, the FBI submitted what they thought were the reasons, the FDIC submitted what they thought were the reasons, all the bank regulators, and nowhere on any of those lists do we find increase in coverage. In fact, what you do find is one study showed that taxpayer exposure was less because the funds were insured up to $100,000. Mr. Chairman, I will just simply close by saying that all the Federal bank regulators say that this legislation will strengthen and reform our Federal guarantee program for bank deposits and by saying that today, if you sell a house for $120,000 or $140,000 or $160,000 or $200,000 and you deposit the proceeds in your bank account, you are probably not a rich person by definition. If you decide to buy a house and you put $150,000 in the bank or transfer it or get a loan from a bank and you deposit it in your account, you lose that, you certainly would not be defined as rich. And if you have a 401(k) and you happen to have over $100,000 in it, that does not make you a rich person. In fact, that represents, for many people, their entire savings is a 401(k); and, increasingly, those accounts are running over $100,000. That is why the AARP and the Securities Investment Institute both endorsed this legislation. Mr. Chairman, I yield back the balance of my time.

Mr. BACHUS. Mr. Chairman, I have two counties, one is Bibb County, one is Shelby County. The school board in those counties is forced to take about 96 percent of their money and deposit it out of county because there are only two hometown institutions, and they would like to deposit in those, as long as those are rated A institutions, and again I say that they are paying a premium on their deposits for this coverage. The second thing I would say is if the gentleman will go back to 1980, what you had is we deregulated the savings and loans. We made tremendous changes in their mission. And at that time they had 30-year mortgages. They had loaned out money at 4 percent, 4.5 percent, 5 percent. From 1979 to 1981, the interest rates increased, the Federal Reserve continued to increase the interest rate because of inflation, which the gentleman from Massachusetts (Mr. Frank) mentioned, and they drove the interest rate up above 20 percent. The prime rate was 21 percent. So the savings and loans were having to borrow money at 21 percent and had loaned it out at 4 and 5 percent; and predictably, particularly in Texas where the price of oil fell, the savings and loans in Texas started failing one right after the other. And as I said earlier, if it were this increase from 40 to 100,000, you would have expected to see it show up in the banks; you would expect it to show up throughout the Nation. I do not think the people in Texas where most of the first failures occurred, Louisiana, I do not think they were engaged in any more fraudulent conduct or reckless behavior except that what they were doing, that was a boom economy in Texas and property values shot up, and there was a bubble and they came back down. But during all of that, the bank fund did not fail. And as I have said before, before one dollar of taxpayer money comes out of this account, it requires the funds to be exhausted. It, second, requires the banks, their assets to be liquidated, and only at that point would the taxpayer step in. That would be a heck of a depression. And I think that would be a depression made only worse if school boards, governments lost their deposits, if people lost their 401(k)s, if they lost any of their savings above $100,000, businesses who had accounts. And some of those might be rich people, the guy that owns the small business and has $400,000 or $600,000 deposited or a contracting company that has just been paid on a contract. I think it would make the recession or depression or economic shock that much worse. I believe that this legislation is sound legislation and should be supported.

Mr. BACHUS. Second, the gentleman did mention the fact that we do have a provision in here covering municipal deposits or government deposits and that is for $2 million. The reason we did that is not to protect the big guy or the rich guy. The reason we did that is from time to time a school system or a city or a county or a governmental retirement system will put $2 million or $1.5 million in a bank and it is really not practical for them to go around and put $100,000 in each bank. And that is basically as a result of the American Association of School Boards and others saying not only do we want to deposit more than that, but in several States, particularly the Farm Belt, there is only one hometown institution. And the school board or the government or the city or the fire district wants to deposit their money in their own hometown. And that is to allow that.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, first of all, I would like to commend the gentleman from California, who must feel like it is Ground Hog Day because he has actually been out here two prior times on this bill. In the 107th Congress, it passed by voice vote. In the 108th Congress, the gentleman from California (Mr. Royce) was here, and his bill passed 424 to nothing, and yet it died in the other body, not because there was opposition, but it simply got caught up in the paperwork. I want to commend him on his persistence. And he is doing this because without this bill, when a mortgage is transferred or assigned or bought, there are always a few people who are not only in default, but even those who are just simply delinquent, behind on a payment, and it misleads those people into believing that they are receiving a call from a debt collector who has to make Miranda-like warnings, and when they do that, they have a tendency not to talk to them. And, in fact, and I will read a letter from some of our Democratic colleagues who are also cosponsoring this bill, in fact, the very thing that we would want these people to do is talk to their new mortgage servicer and establish a relationship to work out of that default and to work out of that delinquency, because there are actually rules that these servicers are supposed to make every attempt to establish such a relationship; yet the Fair Debt Collection Practices Act, it was not meant to be. This was an unforeseen technicality in the interpretation. So the FTC came to the Congress and enlisted the help of the gentleman from California (Mr. Royce) to remedy this. Let me read the letter because I think it says it very well. It was drafted by the gentleman from Pennsylvania (Mr. Kanjorski), who has worked tirelessly on this bill for the last two Congresses. It has a signature of the gentlewoman from New York (Mrs. Maloney), the gentleman from California (Mr. Sherman), the gentlewoman from Ohio (Mrs. Jones), and the gentleman from New York (Mr. Meeks). These are all Democrats and all members of the Committee on Financial Services. They said this about the present state of the law and the need for the gentleman from California's (Mr. Royce) legislation: One, the present Miranda notice misleads borrowers about the nature of the new servicer's relationship. The most important thing a delinquent mortgage borrower can do is call his or her servicer to work out options. The harshly worded warnings actually discourage borrowers from doing just that, from contacting the new servicer out of fear that the company is simply another debt collector. Two, the notice protects borrowers from providing information that the mortgage servicer already has in its possession. Mortgage servicers already possess detailed information about the borrower in the loan files. Third, the notice hurts customer relationships for the remaining term of the mortgage. The mini-Miranda warning is required in all subsequent contacts with the borrower even after the customer has brought their loan current and maintained them for years. In other words, under the present state of the law, these customers are treated for years to come as if they are delinquent or in default, and that is an insulting thing when they have brought their mortgages up to speed. In closing, I will summarize the entire bill this way: In today's market, Mr. Speaker, mortgages are transferred, they are assigned, they are bought. And when that happens, those customers have a right to know whether they are dealing with a debt collector or they are dealing with their mortgage service provider, and that is a big difference. And this law will actually allow that to happen. So I commend the gentleman from Pennsylvania (Mr. Kanjorski), and I commend the gentleman from California (Mr. Royce) particularly for his diligence in this matter, and I would ask the Members of this body to do what the last two Congresses have done, and that is unanimously approve this legislation, which is truly bipartisan and ought to be a model for this Congress as it works to do what is best for our citizens without regard to political party.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, earlier today, I, along with 15 of my colleagues introduced H.R. 1042, the Net Worth Amendment For Credit Unions Act. This amendment to Section 216 of the Federal Credit Union Act (12 USC 1790d(0)(2)(A)) redefines the term ``net worth'' for Prompt Corrective Action (PCA) purposes for credit unions. This legislation is needed in order to avoid an unintended consequence caused by an accounting change that the Financial Accounting Standards Board (``FASB'') is about to promulgate, requiring credit unions to utilize the ``purchase method'' of accounting rather than the ``pooling of interests'' method of accounting to account for credit union mergers. This amendment does not affect accounting practices; credit unions will be required to use the ``purchase method'' of accounting for mergers in order to receive a clean audit. It should be noted that FASB itself has stated that it sees no problem with the amendment from an accounting perspective. The legislation does not grant credit unions that currently lack the authority to offer alternative capital accounts the authority to do so, nor does it confer upon the National Credit Union Administration (NCUA) the regulatory authority or discretion to authorize such accounts now or in the future. This amendment is intended to address a narrow and technical accounting issue and in the process simply maintain the status quo so that, in the case of merging credit unions, 2 + 2 can continue to equal 4. Currently, under the ``pooling of interests'' method of accounting, if a credit union with $2 million in retained earnings merges with another credit union with $2 million in retained earnings, the surviving credit union has $4 million in retained earnings: 2 + 2 = 4. In the absence of this amendment, when the ``purchase method'' of accounting becomes mandatory for credit union mergers, if a credit union with $2 million in retained earnings merges with another credit union with $2 million in retained earnings, the surviving credit union will only have $2 million in retained earnings: 2 + 2 = 2! That inequitable conclusion results from the fact that the Federal Credit Union Act defines the ``net worth'' of a federally-insured credit union as ``GAAP retained earnings'' and under Generally Accepted Accounting Principles when utilizing the ``purchase method'' of accounting only $2 million would be categorized as ``retained earnings'' while the other $2 million would be classified as ``acquired equity.'' Many credit union mergers are done at the request of the NCUA as a way of dealing in a constructive way with troubled institutions. Accordingly, it is in the public interest to redefine the term ``net worth'' for PCA purposes so that a credit union is not unfairly penalized and its net worth diminished merely because of an antiquated definition contained in the Federal Credit Union Act. It is with this in mind that I have introduced H.R. 1042 today. I hope that we will be able to move this important legislation for credit unions through the Financial Services Committee and this body in a timely fashion.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, I thank the gentleman for yielding me time. I associate myself with the remarks of the gentleman from Ohio (Mr. Hobson) and the gentleman from Illinois (Mr. Davis). The gentleman from Illinois (Mr. Davis) mentioned that Tony Hall was a friend to every Democrat and every Republican in this body. He and the gentleman from Virginia (Mr. Wolf) reached across the aisle united in a goal to alleviate hunger throughout the world, to be a friend to those who were sick and in need of hope. He is not only our friend but every sick child in every poor country of the world has a friend in Tony Hall. Anyone who goes to bed hungry in those countries tonight has an advocate in Tony Hall. And those that do not have a job in these poor countries that only wish to work and help bring up their children and educate them, they all have a tireless supporter in Tony Hall. If anyone has done what we might say is the work of the Lord or of our God throughout this world it is Tony Hall. The gentleman from Ohio (Mr. Hobson) last year on the floor of this House described our colleague, former colleague, as the ``real deal,'' and he is the real deal. He was the same back in his district and here in Washington as when he goes to emerging third world countries. Back in his district, where he served for 24 years, the longest-serving Member from Dayton, Ohio, in the history of this Congress, he organized programs to take surplus and leftover food down to the shelters in his district, homeless shelters. And through those programs today on the streets of Dayton and other cities in Ohio, people will go to bed tonight with food in their stomachs because of his efforts in their own hometown. When he was in Washington, he was a tireless advocate. You may recall in 1993 as chairman of the House Select Committee on Hunger that that committee was abolished. Tony Hall went on a hunger strike not for one day, not for 5 days, not for 10 days, but for 22 days. He fasted and went without food. Now that is commitment. That is a ministry. Now today he is doing the same thing as our ambassador to the U.N. agency in Rome. He is not riding a desk. He is not sitting back and have others report to him. He is going out. And his average day is not spent in Rome, but it is spent traveling throughout the world, seeing firsthand, witnessing these different programs, finding out those that work and improving them, finding out those that do not work and are failing. And even today, he is doing what he did here. Poor children, those that are sick, those that are without hope, Tony Hall today in his travels throughout the world is making a better life for them and for us. Let me close by simply discussing two things. One is a 3-page resume, but it is really a witness to a life well served, a life of commitment and devotion, a ministry and a passion that Tony Hall has to the poor and the hungry and the hopeless of this world. UNICEF awards, Oxfam awards, Bread for the World Award, numbers of awards. But Tony Hall would say, Do not recognize me for that. Recognize me for the hope that I have brought to the world, to the poor and the sick and the hopeless. I also would like to introduce this 3-page document, a life well lived, a life really which ought to be honored, and a courthouse is the least thing we should do for him, but also a tribute that the gentleman from Ohio (Mr. Hobson) gave to this great American, this great individual, Tony Hall. And to him and his wife, Janet, I give my sincere and utmost thanks for everything they have done to make this a better world for all of us. Ambassador Tony P. Hall Three times nominated for the Nobel Peace Prize, Ambassador Tony P. Hall is a leading advocate for hunger relief programs and improving human rights conditions in the world. In February 2002, President George W. Bush asked him to serve as the United States Ambassador to the United Nations Agencies for Food and Agriculture. He was confirmed by the U.S. Senate and was sworn in by Secretary of State Colin Powell in September 2002. Prior to entering the diplomatic corps the Dayton, Ohio native represented the Third District of Ohio in the U.S. House of Representatives for almost twenty-four years, their longest serving representative in history. During his tenure, he was chairman of the House Select Committee on Hunger and the Democratic Caucus Task Force on Hunger. He founded and was one of two House members on the steering committee of the Congressional Friends of Human Rights Monitors. He authored legislation that supported food aid, child survival, basic education, primary health care, micro-enterprise, and development assistance in the world's poorest countries. Ambassador Hall also founded and chaired the Congressional Hunger Center, a non-governmental organization committed to ending hunger through training and educational programs for emerging leaders. A founding member of the Select Committee on Hunger, Mr. Hall served as its chairman from 1989 to 1993. During this time, he initiated legislation enacted into law to fight hunger-related diseases in developing nations. He sponsored a successful 1990 emergency measure to assist state-run Women, Infants and Children (WIC) programs. Mr. Hall helped to establish a clearinghouse that provided food through gleaning, a process of gathering grains and produce left on the ground after harvesting. Mr. Hall has worked to promote micro-enterprise to reduce joblessness. In response to the abolishment of the Hunger Committee in April 1993, he fasted for 22 days to draw attention to the needs of hungry people in the United States and around the world. In his efforts to witness the plight of the poor and hungry first-hand, he has visited poverty-stricken and war-torn regions in more than 100 countries. He was the first Member of Congress to visit Ethiopia during the great famine of 1984-5. He has visited North Korea six times since 1995, and was one of the first Western officials to see the famine outside of the capital, Pyongyang. In 2000, he became the first Member of Congress to visit Iraq to investigate the humanitarian situation. During his second week as Ambassador, he traveled to Zimbabwe and Malawi to see the food deficit crisis in southern Africa. Mr. Hall has worked actively to improve human rights conditions around the world, especially in the Philippines, East Timor, Paraguay, South Korea, Romania, and the former Soviet Union. In 2000, he introduced legislation to end the importation of conflict diamonds mined in regions of Sierra Leone, Angola and the Democratic Republic of Congo. In 1983 he founded the Congressional Friends of Human Rights Monitors. In 1999, he was a leader in Congress calling for the United States to pay its back dues to the United Nations. In 1997 and 2000, Mr. Hall introduced legislation calling on Congress to apologize for slavery. He also has worked at promoting reconciliation among diverse peoples through a number of private initiatives. In 1964 Mr. Hall graduated from Denison University in Granville, Ohio where he was a Little All-American football player. During 1966 and 1967, Mr. Hall taught English in Thailand as a Peace Corps Volunteer. He returned to Dayton to work as a realtor and he was a small businessman for several years. Mr. Hall and his wife Janet raised two children. Mr. Hall served in the Ohio House of Representatives from 1969 to 1972, and in the Ohio Senate from 1973 to 1978. On November 7, 1978, Mr. Hall was selected to the 96th Congress. He served on the Foreign Affairs and Small Business Committees before being appointed to the Rules Committee at the beginning of the 97th Congress. Ambassador Hall was nominated for the Nobel Peace Prize for 1998, 1999 and 2001 for his humanitarian and hunger-related work. For his hunger legislation and for his proposal for a Humanitarian Summit in the Horn of Africa, Mr. Hall and the Hunger Committee received the 1992 Silver World Food Day Medal from the UN Food and Agriculture Organization. Mr. Hall is a recipient of the United States Committee for UNICEF 1995 Children's Legislative Advocate Award, U.S. AID Presidential End Hunger Award, 1992 Oxfam America Partners Award, Bread for the World Distinguished Service Against Hunger Award, and NCAA Silver Anniversary Award. He received honorary Doctor of Laws degrees from Asbury College, Antioch College and Eastern College and a Doctor of Humane Letters degree from Loyola College in Baltimore. In 1994, President Clinton nominated Mr. Hall for the position of UNICEF Executive Director.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, our prayer today was offered by Pastor Aubry Wallace. Pastor Wallace is joined by his wife, Shirley. They just celebrated their 51st anniversary. Pastor Wallace and Shirley are the parents of four children. Three of them are serving our country and have served our country. Their son was in the Navy and was deceased while serving. They have another son, who is a Marine, and another that has served in the Air Force. He has pastored three churches in Chilton County, where he is beloved. He also serves as a chaplain for the Chilton County Sheriff's Department, and one of the things I am most proud of him is for his ministry to prisoners there in the Chilton County Jail. He has and is making a difference. He is over a 20-year veteran of the Air Force, where he served in Vietnam for 7 years. So we are very proud of him this morning and thank him very much.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, year after year thousands upon thousands of Americans die of illicit drugs. Year after year billions upon billions of dollars end up in the hands of the cartel bosses who traffic these deadly goods. The flow of drugs will only stop if the flow of money can be contained. It can only be contained if our allies all over the world work together with us to rid the world of that terrible scourge. I rise today to pay tribute to one of those important allies, the Caribbean nation of Aruba. This small island state is leading the way in efforts to counter drug trafficking and drug-related money laundering. In the past, money laundering organizations have attempted to use Aruba's offshore banking and incorporation systems, free-zone areas, and resort/casino complexes to transfer and to launder drug proceeds. However, the timely implementation and rigorous enforcement of anti money-laundering and asset-seizure laws have set an example for others to follow. Prime Minister Nelson Oduber and the Government of Aruba should be commended for recently issuing several decrees on money laundering that include increased oversight of casinos and insurance companies. The Government of Aruba also is in the process of instituting reporting requirements for cross-border currency movements in excess of 20,000 Aruban florins, approximately US$11,200. Aruba has a Financial Intelligence Unit and is a member of the Egmont Group, an international group of financial intelligence units. The Aruba Organized Crime Unit and the Criminal Intelligence Unit of the Coast Guard of the Netherlands Antilles and Aruba fight drug trafficking right alongside the United States Drug Enforcement Agency. Furthermore, Aruba serves as one of two forward operating locations in the Caribbean for U.S. counterdrug aircraft. The forward operating location, located at Queen Beatrix Airport near Oranjestad, provides a landing and servicing area for counterdrug detection and monitoring missions in the region. For this cooperation, I would like to express the heartfelt thanks of the American people. With allies like Aruba on our side, we can win this war, too.

Mr. BACHUS

Mr. BACHUS. Mr. Chairman, let me first start out by saying that the 9/11 Commission said that the work of the Committee on Financial Services and the legislation that we passed in the aftermath of 9/11 had worked very well, very well, to make it much harder today, and this is some very good news for all Americans as a result of the Patriot Act and also President Bush's Executive Order 13224, they said the combination of our efforts and the efforts of the Treasury Department, of FinCEN and OFAC, the Justice Department and the State Department and others, that today it is much harder, much harder for al Qaeda to raise money. It is much more difficult for them to conceal that money and it is much more difficult for them to move that money. They said that we had identified almost 400 terrorist financiers or people that facilitated the funding of terrorists. We have made it much harder, and we have chilled donations. We have decreased donations to a great degree. And let me deal with just two of those. One is the Executive Order that President Bush offered only 2 weeks after 9/11, 13224. As a result of that, we have actually identified millions of dollars, not only here but overseas, of al Qaeda money. We have seized that money. We have designated terrorist facilitators, and, finally, we have actually under that and under PATRIOT Act title III, section 311, we have identified banks that were actually involved in taking money for the terrorists and transferring that. We only have seven countries today in the world that have not cooperated with us in one respect or another. We have come from 58 countries at the time of 9/11 that were actively involved in tracking and seizing terrorist financing to about 100 countries that are doing an exceptional job. And, in fact, 209 countries are actually making financing efforts to combat terrorist financing, 174 countries. We have built quite a coalition when it comes to disrupting terrorist financing, 174 countries. Contrast that to 58 countries at the start of our efforts. Today, 174 countries are seizing terrorist finances and have offered freezing orders. We have had great successes. The 9/11 Commission did say that it was essential that we allow the Treasury Department, FinCEN to have some new ways of working with foreign governments, and the gentleman from Ohio (Chairman Oxley) has included in this provision, and this is very important that we get this through, actually some implementation legislation that will allow us to better cooperate and coordinate with those foreign governments that want to ally with us and our efforts. As a result of the train bombings in Madrid, the bombings in Moscow, the bombings in Casablanca and Istanbul, these countries are ready to help us, but we do need to change these laws. I would urge us to pass this legislation. It passed out of committee overwhelmingly in a bipartisan way. It is very important. And I would close by saying that we have got a counterfeiting measure in this. The law says we have got to catch the counterfeiters. Just the fact that we have counterfeiting equipment is not enough. It is in this provision. We need to pass this bill.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, the gentleman from Georgia said what he wanted to do, he wanted to establish a homosexual marriage as a fundamental constitutional right that the Federal Government would have to not only secure but to protect. That is what he wants to do. When he does that, here is why we are opposed to that. When he does that, he undermines, he not just expands marriage, he alters it to the core. He totally severs it from its whole purpose, and that is the relationship between a man, a woman, and a child. Marriage is one of the most fundamental institutions of a civil society. That would simply cripple it. We are not talking about expanding a right, extending rights or benefits. We are talking about destroying an institution which has preserved and protected us. Our decision today will define us as a Nation. It will define us as a people. It will be a predictor of our future and where our future would be. The only responsible thing for us to do today is to defend the institution of marriage and send this amendment to the States for ratification. A concerted legal and political effort, lead by activist judges, is attempting to affirm homosexual marriage as a fundamental civil right that the Federal Government has a constitutional obligation to secure and protect. In doing so, they are undermining one of the most basic and sacred institutions that exist in an orderly, stable civil society--marriage. What is happening is not a slight change in degree that merely extends benefit or rights to a larger class, but a substantive change in the essence of the institution. It does not expand marriage; it alters its core meaning, for to redefine marriage so that it is not intrinsically related to the relationship between fathers, mothers, and children would sever the institution from its nature and its purposes. In response, the most important and responsible step Congress can take to reserve marriage is to send a constitutional amendment that protects the institution of marriage to the States for ratification.