HR3945OCT28

TheWeekInCongress.com

Week Ending October 28, 2005

H.R.3945 To facilitate recovery from the effects of Hurricane Katrina by providing greater flexibility for, and temporary waivers of certain requirements and fees imposed on, depository institutions and Federal regulatory agencies, and for other purposes.

BRIEF

Congress concludes that some of the 120 insured banks and credit unions providing financial services to customers impacted by Katrina are operating under duress. Banks and credit unions in the areas impacted by Hurricane Katrina have found themselves with some special needs that this bill aims to relieve. Among them are the loss of assets and revenue from properties devastated by the storm and the inability of loan holders to effectively pay back the amounts borrowed. The bill would ease some complications involving banks cashing federal benefit checks in the aftermath of Hurricane.

Treasury regulators would educate banks and credit unions on properly cashing federal assistance and benefit checks and to work especially with those institutions operating under extraordinary circumstances due to the storm.

Transaction or wire fees would be waived on transactions done in institutions that operated in the Katrina impact areas as of August 28, 2005.

Regulators are authorized on a case-by-case basis to hold back on action with respect to undercapitalized institutions and allow them to withdraw amounts from their assets in order to make asset compliance levels.

Specific institutions affected by the bill are those who derive more than 50 percent of their total deposits from local residents, were properly capitalized as of August 28, 2005, and had a plan to come back from this type of financial impact.

Sponsor: Representative Richard H. Baker (R-LA-6^th)

Vote: Passed House 411 to 0 (RC 549) October 25, 2005

Cost to the taxpayers: The House Budget Committee reported that “The bill reduces revenue by less than $500,000 due to lower transfers of the annual Fed surplus to the Treasury.”

MORE INFORMATION

SEC. 2. FINDINGS.

The Congress finds as follows:

(1) On August 29, 2005, Hurricane Katrina, a category 4 storm with an impact area of 90,000 square miles, reached landfall devastating the States of Louisiana, Mississippi and Alabama, causing loss of life and property.

(2) Levee breaches in the flood control system for the city of New Orleans as a result of Hurricane Katrina resulted in tragic flooding, causing additional loss of life and property.

(3) Due to the substantial damage to both property and infrastructure, more than 1,000,000 people were made homeless or brought under financial duress by the effects of Hurricane Katrina.

(4) At least 120 insured depository institutions and 96 insured credit unions are located in the areas of Louisiana, Mississippi and Alabama, declared as major disaster areas by the President.

SEC. 4. SENSE OF THE CONGRESS ON CASHING OF GOVERNMENT CHECKS.

It is the sense of the Congress that--

(1) it is vital that insured depository institutions and insured credit unions continue to provide financial services to consumers displaced or otherwise affected by Hurricane Katrina, which includes the cashing of Federal government assistance and benefit checks;

(2) the Secretary of the Treasury and the Federal financial regulators should seek to educate insured depository institutions and insured credit unions on the proper application of the guidance issued by the Secretary on cashing of Federal government assistance and benefit checks and published in the Federal Register; and

(3) the Federal financial regulators should continue to work with the insured depository institutions and insured credit unions operating under extraordinary circumstances to facilitate the cashing of Federal government assistance and benefit checks.

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