Executive briefing

Northwestern Financial Review, Feb 19, 2000

Senate Passes Bankruptcy Reform

The U.S. Senate on Feb. 2 passed a bill to overhaul the bankruptcy system and make it more difficult for people to wipe out debts. On an 83-14 vote, the Senate approved the bill, which goes to a conference committee to be reconciled with the House measure passed in May. The bills would move the bankruptcy code toward a "needs-based" .system. Those able to pay what they owed could be disqualified from Chapter 7 - which allows unsecured debts such as credit card bills, to be wiped out - and put into Chapter 13, which requires some repayment. A record 1.44 million bankruptcies were filed in 1998, although in recent months the number of bankruptcy filings has begun to decline.

Greenspan Confirmed; Fed Raises Key Rate

By an 89-4 vote, the U.S. Senate on Feb. 3 confirmed Alan Greenspan for a fourth term as Federal Reserve chairman. The vote approved President Clinton's nomination of the 73-year-old Republican, Fed chairman since 1987. The confirmation came a day after the Fed boosted a key interest rate for the fourth time since June. On Feb. 2, the Fed action increased by a quarter point the federal funds rate, which now stands at 5.75 percent. The move was an effort to slow down the U.S. economy and keep inflation in check.

Tanoue Renominated To Lead FDIC

The White House on Feb. 1 made two nominations to the FDIC's fivemember board. FDIC Chairman Donna Tanoue was renominated for a fiveyear term. Her current term expires on Oct. 3. Also nominated was Richard Houseworth, Arizona banking superintendent and chairman of the Conference of State Bank Supervisors. Houseworth would fill a slot vacant for 17 months. Absent from the nomination announcement was Andrew "Skip" Hove, FDIC vice chairman and a former Nebraska banker.

Concerns Remain Over Subprime Restrictions

Lawmakers and regulators on Feb. 8 said that tough restrictions on banks that make subprime loans could hurt low-income consumers and areas that need such loans. In a hearing before the House Banking Committee, federal regulators proposed restricting banks making these loans. The FDIC recently proposed toughening standards for banks specializing in high-risk loans to people with poor credit histories. Some Democrats have expressed concern that the plan would cause Community Reinvestment Act loans to dwindle. Six of the 11 banks that failed in the past 18 months made subprime loans. Eight banks failed last year during booming economic times. The FDIC predicts that 20 banks could fail this year.

Vento Won't Seek Re-election

U. S. Rep. Bruce Vento, the Minnesota lawmaker and second-highest ranking Democrat on the House Banking Committee, will not seek another term after being diagnosed with cancer. The 59-year-old Vento is a 12term member from St. Paul. Vento made the announcement on Feb. 2. Known for working on environmental, housing and banking reform issues, Vento was a strong supporter of credit unions.

Ex-Minnesota Banker Joins Senate Panel

Former Fergus Falls, Minn., banker and Past ABA President Mark W. Olson has Joined U.S. Sen. Rod Grams, (R-Minn.) as his chief banking aide. Olson, 56, will be staff director of the securities subcommittee of which Grams is chairman. While serving as president of Security State Bank in Fergus Falls in 1986, Olson became the youngest banker elected ABA president.