Jim Leach

Mr. LEACH

Mr. LEACH. Mr. Speaker, I thank my distinguished colleague for yielding me this time, and let me just echo the comments of so many about the distinguished service of the gentleman from Ohio (Mr. Lou Stokes), whose friendship is much appreciated; as well as that of the gentleman from New York, (Mr. Solomon), who, through the Committee on Rules, has truly shaped the agenda of the last two Congresses. Second, I would like to thank my good friend, the gentleman from California (Mr. Jerry Lewis), for working with the authorizing committee in such a forthright way, in an appropriations context, which is a rather unusual circumstance but much appreciated. Second, I would like to underscore, as the gentleman from Massachusetts (Mr. Kennedy), the gentleman from New York (Mr. LaFalce), and most of all, the gentleman from New York (Mr. Lazio) have, that included in this appropriations bill is the Quality Housing and Work Responsibility Act of 1998, which represents the first major updating of our public housing laws since the depression. This landmark legislation is one of the two or three most important issues before this session of this Congress. Outdated laws and programs are replaced with a new empowering approach for people in our smaller communities as well as our larger cities. There is much to be proud of in this bill, home ownership, local control, volunteerism, and empowerment, to name a few. On a philosophical note, I am reminded of a speech given last year by the British Prime Minister Tony Blair. He stated: ``In the 1960s, people thought government was always the solution. In the 1980s, people said that government was the problem. In the 1990s, we know that we cannot solve . . . problems . . . without government, but that government itself must change if it is to be part of the solution.'' Mr. Speaker, both the majority and minority members of the Senate and the House committees of jurisdiction, and as has been mentioned here, our extraordinary staffs, as well as the administration, led by Secretary Cuomo, worked tirelessly to craft a reasonable and responsible approach to reform public housing programs in a manner that I believe will achieve efficiencies at the Federal level and advantages at the local level, and empower some of the most needy in our society with the resources to become self-sufficient and to make decisions based on responsible choices. The Quality Housing and Work Responsibility Act of 1998 makes necessary changes to be part of the solution. It symbolizes many things, not the least of which is that serious legislation can be considered during times of difficulties between the administration and the Congress. Finally, let me just conclude by stressing again the extraordinary work of the gentleman from New York (Mr. Lazio) in putting this bill together; the extraordinary thoughtfulness and cooperation of the ranking member, the gentleman from Massachusetts (Mr. Kennedy); as well as the ranking member of the full committee, the gentleman from New York (Mr. LaFalce); and, of course, the thoughtfulness of the gentleman from California (Mr. Lewis); as well as the full committee chairman, the gentleman from Louisiana (Mr. Livingston). I strongly urge support for this legislation. And I would be remiss if I did not say that I am very proud of this particular work product of this Congress.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1756) to amend chapter 53 of title 31, United States Code, to require the development and implementation by the Secretary of the Treasury of a national money laundering and related financial crimes strategy to combat money laundering and related financial crimes, and for other purposes, as amended.

Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume. In conclusion, let me just state that this is a very subtle bill that would not be before the House if it were not for the commitment as well as the persistence of the gentlewoman from New York (Ms. Velazquez). Her hard work and thoughtfulness in my judgment deserve very serious commendation in this body.

Mr. LEACH. Mr. Speaker, H.R. 1756, the Money Laundering and Financial Crimes Strategy Act of 1998, directs the Secretary of the Treasury to create a national strategy for combatting money laundering and other financial crimes by coordinating Federal, State and local efforts and resources. The legislation provides for the designation of high-risk money laundering areas for the purpose of providing these localities with increased Federal assistance and access to information related to money laundering and other financial crimes. The bill also provides a mechanism to fund money laundering investigations conducted by State and local law enforcement agencies. Efforts by law enforcement officials to combat money laundering, the process by which criminal elements seek to legitimize the proceeds of their illegal activities, have taken on particular urgency as operations of large-scale criminal organizations in the United States and abroad have grown increasingly sophisticated. Money laundering and related financial crimes are often inextricably tied to the illegal drug trade that has ravaged so many communities in rural as well as urban sectors of America. State and local law enforcement officials and prosecutors, particularly in less urbanized areas, often find themselves overwhelmed by the sheer size and scope of the criminal enterprises arrayed against them and encounter particular difficulty in following the complex money trails by which these organizations conceal and launder their ill-gotten gains. Recent law enforcement initiatives have demonstrated that working partnerships among Federal, State and local agencies can yield impressive results in the fight against drug-related money laundering. Perhaps the best example of the benefits of a coordinated law enforcement response to money laundering can be found in the Treasury Department's successful use of a geographic targeting order, or GTO, in 1996 and 1997 to combat money laundering in a segment of the money transmitter industry in the New York City metropolitan area. H.R. 1756 is designed to apply the lessons of the New York GTO to other communities in other parts of the country by calling for the formulation of a national strategy for combatting money laundering and related financial crimes that emphasizes the importance of coordination and information sharing among Federal, State and local authorities and by singling out localities in which money laundering is particularly widespread for increased Federal law enforcement support and financial assistance. The bill directs the Secretary of the Treasury, in consultation with the Attorney General, to assist such localities by providing grants, technical assistance and training in information on best practices to support their efforts to detect and prevent money laundering and related financial crimes. In closing, Mr. Speaker, let me say that H.R. 1756 is another example of the spirit of bipartisanship and comity that I believe characterized the work of the Committee on Banking, Housing and Urban Affairs in this particular area. Introduced by the gentlewoman from New York (Ms. Velazquez) and approved by the committee by a voice vote, the legislation commands broad bipartisan support. Companion legislation introduced by the Senator from Iowa, Mr. Grassley, is now pending in the other body. In addition to congratulating the gentlewoman from New York (Ms. Velazquez) in developing and championing this legislation, I would like to commend the ranking minority Member, the gentleman from New York (Mr. LaFalce), and the gentleman from Minnesota (Mr. Vento) for their invaluable assistance in moving this important bill through our committee. Mr. Speaker, I reserve the balance of my time.

Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume. (Mr. LEACH asked and was given permission to revise and extend his remarks.)

Mr. LEACH

Mr. LEACH. Mr. 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. 1756, the bill just passed.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 4005, the bill just passed.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I have no further requests for times, and I yield back the balance of my time.

Mr. LEACH. Mr. Speaker, I yield 3 minutes to the gentlewoman from New Jersey (Mrs. Roukema), who has been so instrumental in bringing this bill forward. (Mrs. ROUKEMA asked and was given permission to revise and extend her remarks.)

Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume. The Money Laundering Deterrence Act of 1998 is intended to strengthen the hand of Federal law enforcement in detecting and prosecuting financial crimes, and to encourage greater reporting of suspicious monetary transactions by financial institutions and their agents. It is estimated that upwards of $500 billion in laundered funds, a large portion of it derived from narcotics trafficking, is cycled through the United States financial system on an annual basis. Any meaningful strategy for combating the international drug trade and other global criminal enterprises must include strong legal mechanisms for detecting the flows of their illicit proceeds. Left unchecked, money laundering has a devastating effect on the integrity of financial institutions and, because it is the lifeblood of drug traffickers, on the social fabric as well. Beginning with the passage of the Bank Secrecy Act of 1970, the Committee on Banking and Financial Services has been at the forefront of legislative efforts to erect a system of financial reporting and recordkeeping designed to give law enforcement authorities sufficient tools to detect and prosecute money laundering offenses. The various reporting requirements imposed by the Bank Secrecy Act and subsequent legislation promote the disclosure of information relating to suspicious financial transactions by financial institutions and other commercial enterprises, and the subsequent dissemination of that information among Federal, State and local law enforcement authorities. In crafting these bills, Congress has sought to advance a number of policy objectives, including facilitating the law enforcement community's access to accurate and complete information regarding possible money laundering, and encouraging safe and sound practices at Federal insured depository institutions, while, at the same time, protecting the free flow of legitimate commerce and the privacy interests of legitimate bank customers. H.R. 4005, as amended by the committee in its June 11 markup to the legislation, contains a series of amendments to the Bank Secrecy Act and other provisions of the United States Code related to money laundering offenses. First, it extends safe harbor protections to independent public accountants who submit reports of suspicious financial activity to the Federal Government. Second, it provides financial institutions with immunity from civil liability when making employment references that may include suspicions of an employee's involvement in illegal activity, unless such suspicions are known to be false or the institution has acted with malice or reckless disregard for the truth. Third, it makes reports of suspicious financial activity filed with the Federal Government available to self-regulatory organizations as defined by the Securities and Exchange Act of 1934, such as the National Association of Securities Dealers. Fourth, it requires the Secretary of the Treasury to promulgate ``Know Your Customer'' regulations within 120 days of enactment of the legislation; submit a comprehensive report to Congress on so-called private banking activities, those personalized services that financial institutions provide to clients with high net worth, often involving complex transactions conducted offshore; prescribe regulations requiring financial institutions to maintain all accounts in such a way as to ensure that the name of an account holder, and the number of his or her account are associated with all activity in the account; and develop criteria to identify areas outside the United States where money laundering is concentrated. H.R. 4005 is a product of broad bipartisan consensus within the committee, which approved it by voice vote, and reflects serious thoughtful input from both the Republican and Democratic members of the committee. I would like to accord special recognition in this regard to the gentlewoman from New Jersey (Mrs. Roukema) and the gentleman from Alabama (Mr. Bachus), who chairs the Subcommittee on General Oversight and Investigations of the Committee on Banking and Financial Services. Under his leadership, and her leadership, the subcommittees have held a series of hearings highlighting aspects of the money laundering problem and the Federal Government's efforts to address it. Several of the provisions in this bill are there simply because of the oversight that was conducted. Before concluding my remarks, Mr. Speaker, let me also recognize the constructive role played by the ranking member, the gentleman from New York (Mr. LaFalce), and the gentleman from Minnesota (Mr. Vento), in shepherding this legislation through committee and on to the floor. I look forward to a successful completion of this task at this time. Mr. Speaker, I submit for the Record correspondence, and attachments thereto, regarding H.R. 4005. House of Representatives, Committee on the Judiciary, Washington, DC, September 28, 1998. Hon. Jim Leach, Chairman, House Committee on Banking and Financial Services, Washington, DC. Dear Jim: I respectfully request that section 9 of H.R. 4005 be removed before the bill is brought to the floor on the suspension calendar. The section, entitled ``Fungible Property in Bank Accounts'' modifies section 984 of title 18 of the United States Code and makes a substantive change to federal civil asset forfeiture law as it relates to the forfeiture of fungible property in the form of cash or funds deposited in a financial institution. As the House Leadership wants to delay consideration of reforms to our federal civil asset forfeiture laws until the 106th Congress, it would be more appropriate for this provision to be considered at that time. Sincerely, Henry J. Hyde, Chairman.

Mr. LEACH. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and insert extraneous material on H.R. 4005, the bill under consideration.

Mr. LEACH. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4005) to amend title 31 of the United States Code to improve methods for preventing financial crimes, and for other purposes, as amended.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I ask unanimous consent that the Committee on Banking and Financial Services have until August 21, 1998, to file reports on H.R. 4321, the Financial Privacy Act of 1998, and H.R. 4393, the Financial Contract Netting Improvement Act of 1998.

Mr. LEACH

Mr. LEACH. Mr. Chairman, I rise in support of the Kolbe amendment and in opposition to the Hefley amendment to follow. Mr. Chairman, I would like to speak principally to the reasons behind the amendment being offered today by the gentleman from Arizona (Mr. Kolbe). The history of America is the story of individual rights. It begins with a country founded on principles which had never been manifest in any society and which were not comprehensively instituted at the founding of the Republic. It has taken two centuries of struggle which have included a Civil War, a suffrage and civil rights movement to ensure the rights of minorities and women. In the context of our history, it is common sense and common decency that no one today be allowed to be prejudiced against simply because of their sexual orientation. The executive order which will shortly be under review has nothing to do with the creation of special privileges, special preferences, quotas or affirmative action in any form, nor does it endorse any so-called life-style. What it does is ensure equality and fairness to a group of individuals by bringing uniformity to already existing Federal nondiscrimination policies. Equal protection under the law is not a privilege to be enjoyed by some; it is a basic right to which every American is entitled. If anyone in this favored land is discriminated against, civil society is weakened and we are all diminished. Bigotry has no place in America and should have no sanction of even the most covert sort. Here let me be clear. If nondiscrimination precepts cannot be sanctioned for men and women who are gay and lesbian, does this not implicitly legitimize discrimination? And if lawmakers assert that equal protection under the law should not be available to one group of Americans, could this not result in actions that none of us could conceivably endorse, the possibility that some Americans could be shunned and perhaps, metaphorically, stoned? Executive orders of this nature and civil rights laws in general cannot by presidential signature or majority vote change people's attitudes, but they can help protect individual rights and remove impediments to the exercise of individual aptitudes. Political leadership involves more than the crafting and execution of laws. An essential role of leadership is to do everything possible to bring people together rather than accentuate differences which have the effect of rupturing society. That is why it is so important for elected officials to appeal to what Abraham Lincoln called ``the better angels of our nature.'' Political debate should thus be measured as to whether it is directed to the best or the least in all of us. In this context, Mr. Chairman, I am concerned that the party to which I belong which sprang out of an individual rights tradition, preeminently a crusade to end slavery, may be in the process of rejecting part of its own heritage. In the American creed, individual rights are not selective. They do not apply to some people and not others. Equal opportunity and protection under the law cannot be denied any law-abiding American no matter how controversial his or her life- style may be. Accordingly, I urge intraparty reconsideration of legislative initiatives of the nature of that which will follow this one, a ``yes'' vote on the Kolbe amendment and a ``no'' on the Hefley amendment.

Mr. LEACH

Mr. LEACH. Madam Speaker, I yield myself 1 minute. Madam Speaker, I would simply respond to a previous intervention. Let me just say the CBO has estimated a revenue loss of $143 million for this bill, but it is important to note that there will be a $510 million increase in revenues to the credit union fund. But because of budget rules, the $510 million cannot be used as an offset to this revenue loss. Instead, the $143 million revenue loss must be absorbed through other tax accounts under the budget rules. I will say in the Senate, the Senate balanced this revenue loss with their IRS reform bill. We have formally by letter informed the Committee on Ways and Means of this circumstance, but I recognize it does produce certain difficulties for the distinguished chairman of the Committee on Ways and Means. All I can say is this is not a surprise. It has been dealt with appropriately in the Senate, it has been flagged here in the House, and there is an offset of approximately three times the revenue loss, but it occurs in another account of the Federal budget.

Mr. LEACH. Madam Speaker, I yield 2 minutes to the distinguished gentleman from Texas (Mr. Archer), chairman of the Committee on Ways and Means.

Mr. LEACH. Madam Speaker, I yield 2 minutes to the gentlewoman from New Jersey (Mrs. Roukema), our distinguished chairman of the Subcommittee on Financial Institutions and Consumer Credit. (Mrs. Roukema asked and was given permission to revise and extend her remarks.)

Mr. LEACH. Madam Speaker, I yield 2 minutes to the gentleman from New York (Mr. Solomon), our distinguished chairman of the Committee on Rules.

Mr. LEACH. Mr. Speaker, before the House today is the Senate amendment to H.R. 1151, the Credit Union Membership Access Act. If the House concurs in the Senate amendment, a step I strongly encourage, this important legislation will be cleared for the President for his expected signature, thereby ensuring that millions of Americans will not be forced out of the financial institution of their choice. This body originally approved the credit union bill on April 1 by a vote of 411-8 and the Senate last week acted by vote of 92-6. This legislation is in response to a 5-4 Supreme Court decision earlier this year which overturned the National Credit Union Administration's interpretation of the 1934 Federal Credit Union Act on what the appropriate common bond should be for Federal credit unions. If the Supreme Court decision were to stand, not only could millions of credit union members be kicked out of their financial institution, but the safety and soundness of the entire credit union system would have been jeopardized. The Senate amendment generally incorporates the House approach to the credit union issue, especially as it relates to the common bond issue, but there are four major differences between the House and the Senate versions. First, the Senate amendment does not impose community reinvestment-like requirements on State and federally chartered credit unions. The House version would have. Second, the Senate amendment limits the total amount of member business loans to approximately 12 percent of a credit union's assets. The House bill would have frozen current NCUA restrictions on commercial lending for one year. Third, the Senate amendment expands upon the prompt corrective action provisions contained in the House bill, which generally would have called on the regulator to issue regulations comparable to those imposed on banks and thrifts under the FDIC Act. The Senate version provides somewhat greater detail. Finally, the Senate amendment struck the House provisions limiting the economic benefit directors or officers could receive from a conversion of the credit union to a stock form of company. These Senate changes, while not in all instances improvements to the House position, are generally acceptable given that the broad approach of the House has been maintained. The Supreme Court case was brought by the banking industry because of a perceived difference in the regulatory and tax treatment of credit unions. There is particular angst among bankers that this legislation does not repeal the tax exempt status of credit unions. However, this issue was not broached in the Supreme Court and the Banking Committee from which this bill originated has no jurisdiction over Federal tax laws. Beyond this, this Congress has little appetite for imposing new taxes. But taxes aside, the competitive regulatory playing field between banks and credit unions is pretty well evened out under this legislation. For instance, the new capital standards and prompt corrective regulatory requirements imposed on credit unions under this bill are similar to those imposed on banks and will ensure the continued safety and soundness of operation of credit unions. In a financial services world where the big are getting bigger from the top down, consumers are increasingly showing their desire to maintain the option of being served by community-controlled institutions, whether they be community banks, savings and loans or credit unions. It is therefore critical that this Congress do everything in its power to ensure that smaller, community-controlled institutions are provided the means to compete and prosper in the marketplace. Credit unions, just one part on the cooperative movement side which have so advantaged American society, represent democracy at work in the marketplace. In protecting them, in legitimizing them, this legislation deserves support. I would strongly suggest a ``yes'' vote on accepting the Senate amendment. I would also strongly urge that the President sign this important legislation. Mr. Speaker, I reserve the balance of my time.

Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume. (Mr. LEACH asked and was given permission to revise and extend his remarks.)

Mr. LEACH. Mr. Speaker, I yield 2 minutes to the honorable gentleman from Ohio (Mr. LaTourette) whose leadership on this issue has been unparalleled. It is his bill and to him a principal amount of the credit for its being brought to the floor is due.

Mr. LEACH. Mr. Speaker, I move to suspend the rules and concur in the Senate amendment to the bill (H.R. 1151) to amend the Federal Credit Union Act to clarify existing law with regard to the field of membership of Federal credit unions, to preserve the integrity and purpose of Federal credit unions, to enhance supervisory oversight of insured credit unions, and for other purposes.

Mr. LEACH. Madam Speaker, I yield myself the balance of my time. Madam Speaker, I thank the gentleman from New York (Mr. LaFalce). Let me just say a couple comments about the process. For a deliberative body, we have moved quickly on this legislation. Within two weeks of the Supreme Court ruling, our Committee on Banking and Financial Services had a comprehensive hearing on the subject. Two weeks later we marked up a bill, and one week later brought it to the floor. Once the Senate has acted, we have responded again within a two week time frame. This is testament, I believe, to cooperation between the parties, as the gentleman from New York (Mr. LaFalce) has mentioned. I think it is very important that I particularly extend my appreciation to the gentleman from Ohio (Mr. LaTourette), the gentleman from Pennsylvania (Mr. Kanjorski), the gentleman from New York (Mr. LaFalce) and the gentleman from Minnesota (Mr. Vento), who have played just an extraordinarily critical role in the legislation. But this is not abstract legislation. It is, most of all, a testament to the role of credit unions in American society and the allegiance which they have obtained. What we have here is an industry that has served its members, served its members well. It has brought services at a competitive rate to people who have controlled their own financial destiny in ways they never have been able to before. It has also brought competition to other kinds of private sector institutions that are not part of the cooperative movement. This is a very fundamental role of cooperatives, to serve members and people who are nonmembers, because of the competition that is implicit within this particular kind of cooperative structure. Finally, I would also stress that this body should above all respect choice, the choice of the individual Americans. Approaches that are designed to deny choice to the individual American in finance, to force Americans by default into institutions that may be beyond their control, is a mistake. What the credit union movement symbolizes is an option for the average American, an option that is a community-controlled circumstance, an option that has served the public historicly exceptionally well. I am confident it will in the future. I am proud of this legislation. I believe it is common sense. I also believe that it is deeply legitimizing of a movement that deserves every aspect of legitimacy that it can muster. I urge my colleagues to support this legislation, and I also urge the President to promptly sign it.

Mr. LEACH. Madam Speaker, I yield back the balance of my time.

Mr. LEACH. Madam Speaker, I yield 1 minute to the distinguished gentleman from New York (Mr. Quinn).