Providing for Consideration of H.R. 1185, Federal Deposit Insurance Reform Act of 2005

PROVIDING FOR CONSIDERATION OF H.R. 1185, FEDERAL DEPOSIT INSURANCE REFORM ACT OF 2005 -- (House of Representatives - May 04, 2005)

Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 255 and ask for its immediate consideration.

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Mr. SESSIONS. Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentlewoman from California (Ms. Matsui), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only.

Mr. Speaker, the rule before us today is a fair and completely open rule that allows any Member with a germane amendment to this legislation to come to the floor and offer it for consideration by the whole House. It provides for 1 hour of general debate, equally divided and controlled by the chairman and ranking minority member of the Committee on Financial Services. It waives all points of order against consideration of the bill, and provides that the amendment in the nature of a substitute recommended by the Committee on Financial Services now printed in the bill shall be considered as an original bill for the purpose of amendment.

Finally, it provides that the bill shall be considered for amendment by section and that each section shall be considered as read. It authorizes the Chair to accord priority and recognition to Members who have preprinted their amendments in the Congressional Record, and provides for one motion to recommit, with or without instructions.

I rise today in strong support of this rule and the underlying legislation, which addresses some fundamental and largely uncontroversial reforms of the deposit insurance system, a system that dates back to 1934 and has served as a source of stability for the banking system of this country for over 7 decades. This legislation, which has the support of 40 bipartisan cosponsors, closely resembles legislation that was H.R. 3717 from the 107th Congress which overwhelmingly passed the House by a vote of 408 to 18, and a bill from the 108th Congress, H.R. 522, which passed the House by an even greater margin of 411 to 11.

The improvements that this legislation makes to the Federal Deposit Insurance Act are simple. First, the bill merges the separate insurance funds that currently protect the deposits of banks and savings associations, creating an even stronger, more stable fund than either fund can provide by itself.

Second, the bill addresses the "pro-cyclical bias" of the current system that requires sharply higher premiums at low points in the business cycle, when banks are least able to pay them and funds are most needed for lending to create economic growth. By giving the FDIC the tools it needs to manage these funds more appropriately, this legislation will ease volatility in the banking system and speed up recovery during economic downturns.

Third, the bill increases the amount of deposit insurance available to depositors while also indexing it for future inflation. The system has gone 25 years without such an adjustment, the longest period in history; and this small increase in the safety net for savings of American families is now necessary if deposit insurance is to maintain its future relevance. By raising the levels to $130,000 for personal savings accounts, $260,000 for personal retirement accounts, and $2 million for in-state municipal deposits, it will encourage more people to save and to reinvest in their local communities.

Mr. Speaker, I have spent a great deal of time with community bankers from my district and all across north Texas, and one of the things that I have heard them say is that strengthening the deposit insurance system will help small neighborhood-based financial institutions to continue playing an important role in financing their own local economic development.

Deposits that community banks are able to attract through the Federal deposit insurance guarantee return to the community in the form of consumer and small business loans, community development projects, and home mortgages. We simply cannot allow such an important economic generator for our local communities to evaporate or to be rendered irrelevant by inflation. The savings of Americans should not be allowed to go unprotected, and we cannot forget how important the role of community banks is to the economic development and vitality of our Nation.

Mr. Speaker, I would like to thank today my friend, the gentleman from Alabama (Mr. Bachus), the chairman of the Subcommittee on Financial Institutions and Consumer Credit, for his hard work in bringing this legislation to the floor today. I would also like to thank the gentleman from Ohio (Chairman Oxley) for all of his leadership and vision on this issue on behalf of American families, and the safety and soundness of our Nation's banking system.

Mr. Speaker, I reserve the balance of my time.

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Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, today for the first time, I have had an opportunity now after being on the Committee of Rules for 8 years to have the gentlewoman from California (Ms. Matsui) present the rule where we have worked together. I enjoyed this very much. I appreciate the gentlewoman working with us.

Mr. Speaker, I support this common sense legislation to improve the Federal Deposit Insurance system, and encourage reinvesting in our country's local communities.

I urge all of my colleagues to support this open rule and the underlying legislation.

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

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