June 30, 1999  Testimony of Representative Jan Schakowsky before the Rules Committee in Support of Consideration of Amendments to H.R. 10 Good afternoon Mr. Chairman, Congressman Moakley, and members of the committee.  Thank you for giving me the opportunity to speak before you today on behalf of my proposed amendments to H.R. 10.   I have three amendments that I urge you to rule in order for consideration during debate on H.R. 10, the Financial Services Modernization Act.  These are modest amendments, but they will provide important information and protections for consumers, small businesses, and farmers.   The first amendment would require banks to provide each depositor with three free opportunities each month to conduct banking business with an individual employee of the bank.   The second amendment would require that bank regulators report CRA Ratings for a federally regulated depository institution by state for each state where the institution has a branch.  The third amendment would direct the US Treasury Department to study, with Federal bank regulators, the effect of this bill on small business and farm lending and suggest legislative and regulatory changes as necessary to aid small business and farm lending. There is great need for these amendments.  First, let's consider the small business study amendment.  This bill encourages consolidation of banks into large financial conglomerates and thus, threatens the end of small banking.  Unfortunately, small business relies on small banks for their financing.  Sixty-seven percent of all small businesses get their credit from banks.  The second biggest lender to small business—finance companies—only make up 13 percent of all credit to small businesses.  Moreover, anything that helps small business is a boon to the country as small business accounts for 47 percent of all sales and 53 percent of all jobs in the U.S.  A world without small banks could be disastrous for small business and the national economy.  Chairman of the Federal Board of Governors, Alan Greenspan, acknowledged such before the Banking Committee during hearings on H.R. 10.  He said, "[small bank lending is] inherent in the way small business is effectively financed.  If it turned out that a lot of the community banks would sort of fade or be absorbed into large institutions, I would be concerned."  My amendment will ensure that Mr. Greenspan, this Congress, and the public will have the necessary information to combat any negative effects on small business from this legislation. My other amendments are also designed to protect consumers and communities.  For instance, the Three Free Teller Amendment will ensure that consumers have access to people.  Today, banks are increasingly charging for teller access to encourage ATM usage.  While that may increase their efficiency, it will also increase our alienation from our banks.  That alienation will only be exacerbated by the dramatic changes in our financial services brought by this bill.  In this strange place--and this is particularly important for seniors who don't have strong histories with computerization--consumers ought to have the benefit of human intelligence and human compassion.  My amendment will ensure that they have it. The CRA State-by-State Rating Amendment will protect community reinvestment.  In Section 103, H.R. 10 won't allow affiliation of banks with financial services companies unless they meet the credit needs of communities.  My amendment will enable regulators to better determine if financial institutions meet their obligation in every state. As important as the policy behind these amendments is the procedure allowing their consideration.  You will find that these amendments are in order.  The first amendment, Three Free Teller Transactions, is in the section on ATM Fees.  Both subjects deal with customer's access to their accounts and both try to improve that access.  My amendment takes a different approach—it would ensure that a human being is available to help consumers get access to their account. This amendment shares Banking Committee jurisdiction with H.R. 10 as it regards bank accounts. The second amendment is also in order.  The bill broaches CRA when it requires a 'Satisfactory' CRA Rating as a condition of banks affiliating with insurance companies or securities firms.  It does so to ensure that banks will continue to serve communities despite expansive business plans.  My amendment would better enable regulators to determine if banks are meeting their obligation.  This amendment would share Banking Committee jurisdiction with H.R. 10 because CRA is a Banking Committee issue.  The third amendment is in order, as well.  This bill is filled with studies of the affect of the legislation.  There is a study of the impact on the small banks.  There should be a study on the impact on the small businesses that rely on these industries and my amendment would bring that about.  And, like those other studies, it would give us more information to better govern in this critical area.  As the study deals with lending, it shares jurisdiction in the Banking Committee.  Nonetheless, I would request for any of the necessary waivers to allow for consideration of the amendments.  And I urge you to join me, Representatives Lee, Gutierrez and, in the case of the small business lending study, Representative Watt in support of these amendments on the House floor.  Thank you for your time and consideration.    Home In the News Jan in DC Capitol Hill 9th District, IL Services Feedback