SIMPLY THREE SEPARATE CRITERIA, A LENDING TEST EVALUATES
           WHETHER OR NOT A BANK HAS A RECORD OF MEETING THE CREDIT NEEDS
           OF ITS LOCAL COMMUNITY. BOY, IS THAT AFL. HAS THE BANK MET THE
           CREDIT NEEDS OF ITS LOCAL COMMUNITY. AN INVESTMENT TEST
           EVALUATES HOW WELL A BANK SATISFIES THE CREDIT NEEDS OF ITS
           LOCAL NEIGHBORHOODS THROUGH QUALIFIED COMMUNITY INVESTMENTS

           THAT BENEFITS THE ASSESSMENT AREA. ANOTHER HORRENDOUS -- THIS
           IS ERX TORGSE WE WERE HEARING ABOUT. FINALLY A SERVICE TEST
           THAT EVALUATES HOW WELL THE NEEDS OF THE COMMUNITY NEEDS ARE
           MET BY THE BANK'S RETAIL DELIVERY SYSTEMS. ALL OF THESE THINGS
           GO INTO DEFINING WHAT C.R.A. IS ABOUT. AGAIN, NO BUREAUCRAT
           TELLING SOMEBODY ON THE FRONT END HOW TO DO IT, BUT RATHER
           ASSESSING WHETHER OR NOT THE APPROPRIATE DECISIONS WERE MADE --
           THE DECISIONS WERE MADE IN THE PRIVATE SECTOR IN AN APPROPRIATE
           WAY, IN WAYS THAT WILL ACHIEVE RESULTS. ANOTHER THING C.R.A. IS

           THOUGHT IS SANCTIONS. THIS GETS TO THE INFLAMMATORY LANGUAGE WE
           HEARD HERE ON THE FLOOR ABOUT EXTORTION AND A GUN TO THE HEAD
           AND THE REST OF IT. THERE ARE TO SANCTIONS FOR POOR
           PERFORMANCE. NO EXPLICIT SANCTIONS. WHAT IT DOES, THE
           REGULATORS TAKE A INSTITUTION C.R.A. RATEINGS INTO ACCOUNT IN
           VIEW WALLOW OWE MAKING EVALUATIONS WITH REGARD TO THEIR
           ATTEMPTS TO EXPAND, MERGE OR OTHERWISE CHANGE THE WAY THEY DO
           BUSINESS. SO WHAT YOU HAVE HERE THEN IS A MODEST ATTEMPT TO

           PROVIDE THE BASIS FOR COMMUNITY REINVESTMENT AND EVEN THAT IS
           UNDER ATTACK. AGAIN I THINK, BY SOME SHOP WARN AND JUST ALREADY
           HOPEFULLY DISCREDITED POLITICS THAT I JUST DON'T THINK THE
           AMERICAN PEOPLE CARE TO HEAR ANYMORE. IT IS FIGHTING
           YESTERDAY'S BATTLES ALL OVER OR YOGA BAY RA WOULD SAY IT IS
           DEJA VU ALL OVER AGAIN. THE SENATOR FROM ALABAMA WOULD EXEMPT
           86% OF OUR NATION'S BANKS. THAT'S THOSE UNDER $250 MILLION IN

           ASSETS FROM THE PROVISIONS OF THE COMMUNITY REINVESTMENT ACT.
           NOW THIS IS NOT THE FIRST TIME HE HAS OFFERED THIS AMENDMENT IN
           1995, THIS VERY AMENDMENT WAS CONSIDERED AS PART OF A BANKING
           REGULATORY RELIEF BILL. AT THAT TIME, THE COMMUNITY RE-
           RE-INVESTMENT ACT REGULATIONS WERE UNDERGOING REVISION TO MAKE
           THEM LESS BURDENSOME AND MORE EFFECTIVE FOR BANKS, CUSTOMERS,
           CONSUMERS AND COMMUNITIES. SO THE AMENDMENT WAS UNNECESSARY AND

           COUNTERPRODUCTIVE THEN. IT IS EVEN MORE SO NOW. IT IS IN
           ADDITION TO THE -- EXCUSE ME -- IN ADDITION TO FAILING TO
           RELATE TO ANYTHING HAVING TO DO WITH THE CURRENT REALITY, IT
           FAILS TO MAKE THE CASE THAT IT WILL HELP EFFECTUATE THE GOALS
           OF THE COMMUNITY REINVESTMENT ACT. THE ATTEMPT TO DESCRIBE THE
           C.R.A. AS OVERLY BURDENSOME TO BANKS IS NOT TRUE, HAS NOT BEEN
           TRUE, IT IS FOUGHT TRUE, AND FRANKLY THE BANKS THEMSELVES HAVE
           STEPPED FORWARD TO TELL US THAT THEY BELIEVE THAT THE C.R.A. IS

           A POSITIVE THING THAT ALLOWS THEM TO DO GOOD AND DO WELL. ARE
           LET ME SHARE FOR A MOMENT SOME. COMMENTS BY MEMBERS OF THE
           BANKING INDUSTRY. ALAN MORSE OF THE COMMISSION OF BANKS FOR THE
           COMMONWEALTH OF MASSACHUSETTS, DIVISION OF BANKS AND LOAN
           AGENCIES, AND I QUOTE, "I WOULD LIKE TO DISPEL ANY MYTHS WHICH
           MAY STILL EXIST ABOUT C.R.A. MYTHS WHICH ABOUND NOT ONLY AMONG
           BANKERS, SOME BANKERS BUT AMONG MANY REGULATORS AND COMMUNITY

           GROUPS." HE SAYS, "C.R.A. MAKES GOOD BUSINESS SENSE. OF THE
           MANY BANK FAILURES THAT OCCURRED IN MASSACHUSETTS OVER THE LAST
           THREE YEARS, I CAN ASSURE YOU THAT NOT ONE IS ATTRIBUTABLE TO A
           BANK MAKING TOO MANY C.R.A. LOANS. WE TEND TO FORGET THAT AFTER
           ALL SOUND LOANS TO PEOPLE AND BUSINESSES IN AN INSTITUTION'S
           OWN ROW CALL COMMUNITY IS WHAT C.R.A. IS ALL ABOUT. THE FALSE
           ASSUMPTIONS BY SOME THAT LOW AND MODERATE INCOME PERSONS ARE
           NOT DESERVING OF OR CANNOT USE BANKING SERVICES IS HARMFUL TO

           THE COMMUNITIES, THE INSTITUTIONS AND THE ECONOMY." AGAIN, THIS
           IS SOMETHING THAT EFFECTS US ALL. IF WE DON'T HAVE CAPITAL
           FLOWS GOING TO ALL PARTS OF OUR COUNTRY, IT IS KIND OF LIKE NOT
           HAVING BLOOD CIRCULATE TO YOUR FEET. YOU CAN EITHER GET THE
           BLOOD CIRCULATING TO YOUR FEET OR YOU CAN CUT IT OFF, OR YOU
           CAN WALK AROUND IN PAIN AND MYSTERY. NOW -- MISERY. WE CAN
           DECIDE WE WILL LOOK AT BAY BAN DONNED COMMUTES WITH BOARDED UP
           HOUSES NO JOBS WHERE PEOPLE CAN'T ACCESS CREDIT OR WE CAN DO

           SOMETHING TO GET THE BLOOD PUMPING INTO THE COMMUNITY AND
           THAT'S WHAT THE COMMUNITY REINVESTMENT ACT DOES. ANOTHER BANKER
           TALKING ABOUT
           
           C.R.A., "MY MESSAGE IS SIMPLE: COMMUNITY REINVESTMENT IN LOW
           AND MODERATE ANYBODY HOODS IS GOOD AND PROFITABLE BUSINESS."
           AGAIN DOING GOOD AND DOING WELL AT THE SAME TIME. NO RA BROWN
           KNELL, ME RID YAN BANK CORP. "I WANT TO REITERATE THE C.R.A.
           OFFERS THE OPPORTUNITY FOR ALL OF US TO DEVELOP MAJOR ECONOMIC

           ISSUES IN OUR ENVIRONMENT TODAY." SO THE QUESTION BECOMES, WHAT BATTLE ARE WE FIGHTING HERE?
           WHAT IS GOING ON?
           WHY ARE WE FIGHTING A BATTLE THAT DOESN'T EXIST?
           WHY ARE WE CREATING AN ERSATZ CRISIS OR ERSATZ SOLUTION IN
           SEARCH OF A PROBLEM IF BANKERS DON'T THINK THE PROBLEM EXISTS
           IF THE CREDIT UNIONS ARE HAPPY WITH THE BILL AS IT IS, AND I
           WOULD POINT OUT THAT THE LETTER FROM THE CREDIT UNION, WHAT'S
           THE QUOTE -- THEY ARE HAPPY WITH THE BILL "AS PASSED BY

           COMMITTEE." AS PASSED BY COMMITTEE DOES NOT PEEN THE SENATOR
           FROM ALABAMA OR THE AMENDMENT BY THE SENATOR FROM TEXAS. IF THE
           CREDIT UNIONS LIKE THE BILL AS IT IS, IF THE BANKERS AREN'T
           ACCEPT WITH THE COMMUNITY REINVESTMENT ACT, WHAT THEN ARE WE
           TALKING ABOUT AND WHY ARE WE TALKING ABOUT IT?
           LET ME SUBMIT TO YOU, LADIES AND GENTLEMEN, THAT THE REASON WE
           ARE TALKING ABOUT IT IS THAT SOME PEOPLE LIKE TO ENERGIZE
           CONFLICT AND ANGER AS A PART OF THEIR POLITICS. SOME PEOPLE
           LIKE TO HAVE PEOPLE MAD AT EACH OTHER, BECAUSE WHEN THEY GET
           PEOPLE MAD AT EACH OTHER THEN THEY CAN GET THEIR VOTERS

           PARTICULARLY AGORY AND THEIR SUPPORTERS ANNOYED, AND OUT OF
           THAT ANNOYANCE THEY WIND UP GETTING POLITICAL POWER, AND THAT'S
           WHAT I THINK ALL OF THIS REALLY COMES DOWN TO BEING ABOUT. AND
           I DON'T MEAN TO BE NASTY AND I DON'T DON'T MEAN TO BE
           DISCOURTEOUS TO ANY OF MY COLLEAGUES, BUT IT IS JUST STUNNING
           TO ME THAT WE WOULD CONTINUE TO HAVE A DEBATE ABOUT BURDENSOME
           NATURE OF THE COMMUNITY REINVESTMENT ACT WHEN THE BANKS
           THEMSELVES AREN'T COMPLAINING ABOUT IT. NOW TO SAY WELL THEY
           ARE NOT COMPLAINING ABOUT IT BECAUSE THEY ARE SCARED, BECAUSE

           THERE IS A GUN AT THEIR HEAD, REALLY JUST -- I MEAN IF THAT
           SUGGESTED THAT THEY ARE NOT ONLY NOT BEING BURRED BUT THEY ARE
           TOO COWARDLY TO TALK ABOUT IT. I DON'T THINK ANY OF PEOPLE THAT
           RUN THESE INSTITUTIONS ARE TOO AFRAID TO PEEK SPEAK UP FOR
           THEIR OWN INTERESTS, PARTICULARLY BANKERS. IF YOU THINK ABOUT
           THIS INSTITUTION HAS NEVER BEEN KNOWN NOT FOLLIES ENTO BANKERS.
           IF BANKERS WANT TODAY COME PLAY ABOUT SOMETHING, THEY COULD
           HAVE PROSTITUTE IT TO THE ATTENTION OF THIS COMMITTEE AND TO
           THIS INSTITUTION. THEY HAVE THE POWER, THE CLOUT AND HAVE NEVER
           BEEN TOO SHY TO DO SO IN ROAR REGARD WHEN THEY NEEDED

           SOMETHING. WHEN THEY NEEDED BAILING OUT OR NEEDED SOME SUPPORT,
           WHEN THEY NEEDED REGULATORY -- YOU KNOW THIS INSTITUTION HAS
           BEEN VERY RESPONSIVE TO BANKERS, AND I SUGGEST THAT THEY HAVE
           NOT BEEN AFRAID TO SHOW THEIR FACES IN COMPLAINING ABOUT THE
           COMMUNITY REINVESTMENT ACT. NOW, TALK A LITTLE BIT ABOUT THE
           HISTORY OF THE C.R.A. THE C.R.A. WAS PASSED IN 1977 TO COMBAT
           WHAT WAS CALLED THE REDLINING OF CERTAIN NEIGHBORHOODS. RED

           LINING REFERRING TO THE PRACTICE OF -- IN SOME INSTANCES PEOPLE
           ACTUALLY FOUND EVIDENCE WHERE RED LIKES WERE DRAWN ON MAPS TO
           INDICATE AREAS THAT WERE OFF LIMITS FOR LENDING. THE GOAL OF
           THE C.R.A. IS TO ENCOURAGE BANKS TO MEET THE CREDIT NEEDS OF
           THEIR ENTIRE KPUNTS, INCLUDING LOW AND MODERATE INCOME AREAS.
           NOTHING MORE, NOTHING LESS. THIS OBLIGATION HAD ITS ROOTS
           FRANKLY IN THE BANKING ACT OF 1935, WHICH REQUIRED BARKSF TO
           MEET THE CONVENIENCE AND NEEDS OF THEIR COMMUNITIES, AND THAT
           OF COURSE WAS REITERATED IN THE BANK HOLDING COMPANY ACT OF

           1956 AND OF COURSE THE BANKS CHAR TERSE THEMSELVES. SO C.R.A.
           IS NOT NEW, REALLY, IN THAT REGARD. THERE ARE PRECEDENCE IN
           OTHER EXISTING LAWS WITH REGARD TO THE INTERAT THE TIME --
           INTENT OF MAKING CERTAIN THAT BANKING AND THAT THE ACCESS TO
           CAPITAL AND CREDIT IS EVENLY AND EQUITABLY DISTRIBUTED
           THROUGHOUT ALL COMMUNITIES. THE C.R.A. DOES NOT REQUIRE ANY
           BANKS TO MAKE BAD LOANS. IT ONLY ASKS THEM TO EXPLORE GOOD LOAN
           POSSIBILITY IN THEIR ENTIRE MARKET AREA. C.R.A. OPENS NEW

           MARKETS AND ALLOWS BANKS AGAIN TO DO GOOD WHILE DOING WELL.
           NOW, IT IS CRITICAL AGAIN TO KEEP IN MIBEDE WHAT IT IS AND WHAT
           IT IS NOT. -- KEEP IN MIND WHAT IT IS AND WHAT IT IS NOT. IT IS
           NOT AN EFFORT TO TREAT BANKS AS IF THEY ARE ARMS OF THE
           GOVERNMENT. IT DOES NOT SET UP BANKS AND FINANCIAL INSTITUTIONS
           AS SOCIAL SERVICE AGENCIES. IT IS NOT ABOUT TREATING THEM AS
           THE EQUIVALENT OF A GOVERNMENT GRANT. THIS IS NOT GIVING MONEY.
           

           MR. INOUYE: TO ANYBODY. IT IS NOT A CREDIT ALLOCATION. IT IS
           NOT FORCING SOMEBODY TO GIVE CREDIT TO A PARTICULAR GROUP OR A
           PARTICULAR COMMUNITY IN A PARTICULAR WAY. AND IT CERTAINLY IS
           NOT ABOUT FORETES. I CERTAINLY HOPE THAT NOBODY GETS AWAY WITH
           DEMONIZING THE KPUNT REINVESTMENT ACT ON THE BASIS OF RACE OR
           DEMONIZE IT FRANKLY ON THE BASIS THAT IT IS FOR INNER CITY
           COMMUNITIES BECAUSE IT IS NOT. IT IS ABOUT KPUNTS ALL OVER THE
           COUNTRY AND PARTICULARLY IN RURAL COMMUNITIES. ACTUALLY, RURAL
           COMMUNITIES IN SOME INSTANCES ARE MORE CHALLENGED THAN ARE

           INNER CITY AND URBAN AREAS IN TERMS OF GETTING ACCESS TO
           CAPITAL AND CREDIT. WE HAVE -- IT IS ESPECIALLY IMPORTANT TO
           PRESERVE THE C.R.A. OBLIGATIONS FOR RURAL BANKS WHEN OFTEN THEY
           ARE THE ONLY GAME IN TOWN FOR CREDIT PURSE. SEVERAL YEARS AGO
           OUR BANKING COMMITTEE HELD SOME C.R.A. OVERSIGHT HEARINGS ANWE
           DISCOVERED CASES OF SMALL BANKS IN WHICH THE SERVICE AREA
           CONSISTED OF TWO TOWNS, EACH WITH A POPULATION OF ABOUT 10,000.
           THE BANK IN THAT CASE WAS FOUND TO BE IN SUBSTANTIAL

           NONCOMPLIANCE WITH C.R.A. BECAUSE ITS LOAN PORTFOLIO CONSISTED
           OF ONLY 5% OF THE TOTAL ASSETS OF THE BANKS. NOW AGAIN, 5%, YOU
           SAY HOW COULD THAT HAPPEN?
           YOU GOT A BANK IN A LITTLE TOWN. WHY WOULD IT ONLY GIVE 5% OF
           ITS LOANS IN THE TOWN?
           WELL, IN SOME INSTANCES THE INVESTMENTS IN TREASURY RICE BE
           OTHER THINGS LIKE THAT WIND UP BEING MORE PROFITABLE OR THE
           BOTTOM LINE, BUT IT CERTAINLY DOES THE SERVE THE INTERESTS OF
           THE COMMUNITY AND THAT IS NOT WHERE THE BANKING LAWS AGAIN
           GOING BACK TO 1935, THAT IS NOT WHERE THE BANKING LAWS WANT TO

           TAKE US. AND FRANKLY THAT DOES NOT IN ANY WAY REFLECT OR RELATE
           TO OR IF ANYWAY SHOW SUPPORT BACK FOR THE KIND OF SUPPORT THAT
           TAXPAYERS AND CITIZENS OVER ALL GI TO THESE FINANCIAL
           INSTITUTIONS. THE LAST TIME THE EFFORTS WERE MADE TO EXEMPT
           SMALL BACHGS FROM THE C.R.A., AND I AM SPEAKING SPECIFICALLY TO
           THE AMENDMENT BY THE SENATOR FROM ALABAMA, THERE WAS AN ARTICLE
           THAT APPEARED IN THE MADISON CAPITAL TILES IN WISCONSIN, AND IT
           IS "BANK MEASURE BAD FOR FARMS." REFERRING TO THAT AMENDMENT,

           THE VERY SAIL AMENDMENT. THIS ARTICLE, BANK AMERICA YOU ARE BAD
           FOR FARMS, PRESENT THE VIEW OF A CONCERNED RURAL RESIDENT WHO
           WAS CONCERNED ABOUT THE "UNPAINTED BARNS AND BOARDED UP RURAL
           BASE BUSINESSES" THAT SHE SAW IN HER COMMUNITY. I WOULD LIKE
           THIS ARTICLE ACCEPTED FOR THE RECORD IN ITS ENTIRETY.
           

           THE PRESIDING OFFICER: WITHOUT OBJECTION.
           

           MS. MOSELEY-BRAUN: THE AUTHOR STATED IN THE ARTICLE, AND I
           QUOTE, "AS IN ALL COMMUNITIES, RURAL CITIZENS NEED CREDIT. WHEN
           FARMERS, OTHER SMALL BUSINESSES AND RURAL CITIZENS DEPOSIT
           THEIR MONEY IN THEIR LOCAL BANK, THEY DO SO BOTH TO PROTECT
           THEIR FUNDS AND WITH THE HOPE THAT WHEN THEY WANT TO START A
           NEW BUSINESS OR PRI A NEW FAMILY MEMBER INTO THEIR FARM
           OPERATION, THE LOCAL BANK WILL IN TURN LEND THEM MONEY. BUT
           SOMETIMEBANKS AND ESPECIALLY MANY RURAL BANKS ESTABLISH A VERY
           DIFFERENT PATTERN WHERE LOCAL RENDING TAKES A LOWER PRIORITY

           THAN MAKING MORE SURE INVESTMENT LIKE FEDERAL GOVERNMENT
           SECURITIES. THUS, SUCH BANKS DRAIN LOCAL RESOURCES OUT OF THE
           VERY LOCALITIES THAT SUPPORT THEM MAKING IT MUCH HARDER FOR
           LOCAL CITIZENS TO GET CREDIT. I DON'T KNOW HOW MANY PEOPLE WHO
           ARE LISTENING TO ME NOW GOT A CHANCE TO HEAR EARLIER COMMENTS
           ABOUT THE NASTY FEDERAL GOVERNMENT, BUT HERE THE LAID SI SAYING
           THEY ARE TAKING MONEY OUT OF LOCALITIES IN RURAL COMMUNITIES
           AND INVESTING THEM IN FEDERAL GOVERNMENT SECURITIES. SHE GOES

           ONTO DESCRIBE HOW THE COMMUNITY REINVESTMENT ACT SPURRED ONE
           BANK IN PARTICULAR TO INCREASE ITS COMMITMENT TO AGRICULTURAL
           AND SMALL BUSINESSES. AND I QUOTE, SHE SAYS, "IN RURAL AREAS
           WHERE OFTEN THERE IS LITTLE COMPETITION AMONG BANKS, IT IS
           WRONG TO REVOKE ONE OF THE FEW ACCOUNTABILITY MEASURES CITIZENS
           HAVE. WELL, MR. PRESIDENT, I BELIEVE SHE IS RIGHT. EVEN IF
           BANKS UNDER $250 MILLION REPRESENT A SMALL TOTAL OF BANKING

           ASSETS, THEY STILL REPRESENT 100% OF THE OPTIONS FOR MANY SMALL
           TOWN RESIDENTS. AND TO GO BACK TO THE ARTICLE THE AUTHOR ALSO
           WRITES, "IF RURAL COMMUNITIES ARE TO REGAIN THE VITALITY THAT
           CITIZENS DESERVE, THEY NEED TRUE HELP AND MEANINGFUL SOLUTIONS,
           PERMITTING BANKS FREE REIN IN THE NAME OF REGULATORY RELIEF IS
           NOT ONE OF THEM." IN ADDITION TO THE AICLE I JUST MENTIONED, I
           WOULD LIKE, MR. PRESIDENT, TO SUBMIT A LETTER FOR THE RECORD.

           THIS LETTER, WHICH I RECEIVED YESTERDAY EXPRESSES STRONG
           OPPOSITION TO THE AMENDMENT BY
{END: 1998/07/24 TIME: 11-45 , Fri.  105TH SENATE, SECOND SESSION}