Hurricane Katrina Financial Services Relief Act of 2005

HURRICANE KATRINA FINANCIAL SERVICES RELIEF ACT OF 2005 -- (House of Representatives - October 26, 2005)

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

Mr. Speaker, I rise today in support of H.R. 3945 and express appreciation to the chairman and the ranking member and the members of the Committee on Financial Services for their continuing assistance for those who are victims of Hurricane Katrina.

In this instance, it is relative to financial institutions who now find themselves under some financial duress as collateral for loan obligations has been impaired, or in the case of loan repayments, the revenue streams available to the borrower are no longer available for repayment of loan obligations.

Under current regulatory law, the regulator must act when a financial institution's financial characteristics take on certain problems. In the instance of this legislation, we are providing unprecedented flexibility for the regulator with regard to capital and net worth standards for lending institutions. Stated another way, we know these institutions are only impaired as a result of the consequences of Hurricane Katrina as they were all adequately-to-well-capitalized the day before the storm made landfall.

In addition to that capital and net worth forbearance, we also extend terms relative to deposit of insurance proceeds. Normally, when there is a large influx of assets into the bank, deposits or really liabilities, the bank is then required to take certain financial actions to ensure its financial solvency. This provides the regulator with the ability to allow that aberrant behavior brought on by Hurricane Katrina insurance payments not trigger normal regulatory responses.

To say it a different way, the bill provides relief to financial institutions which today could be found to be troubled which are fully capable of restoration of their responsibilities over time if the regulator is given the ability to exercise the powers in this legislation.

I think it is well crafted. I think it is responsive to the problems identified, and I would hope the House would act favorably on its consideration.

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

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

Mr. Speaker, I certainly appreciate the comments of the gentleman from Massachusetts and his courtesy extended during the course of consideration of this and a number of other measures relating to the response to the Katrina effort. I feel it entirely appropriate, in light of the many people who are still adversely affected by the storm, to not appear that we are only expressing interest in the financial institutions.

There are many individuals today where their employment is no longer possible because the structure where they worked is no longer there. There are folks who cannot go back to work because other employees are unable to be located. There are many people still without homes living in a variety of circumstances across the country. The state of emergency continues.

In reaching out to those individuals, we are at work on a number of measures, one of which I hope the House will soon consider, H.R. 4100, relative to the Louisiana Recovery Corporation. I will be speaking to that issue at length in hearings over time, but I certainly wanted to take advantage of the opportunity presented to let individuals adversely affected by the current storm circumstance understand that this is only one small part of a very large effort by all of the members of the House delegation from Louisiana, as well as the members of the Committee on Financial Services, to be responsive to the entire array of identified difficulties.

In fact, the corporation, once created and authorized by the Congress, would enable to assist financial institutions and homeowners with the acquisition of mortgages and assuming the debt obligations for those borrowers, as well as some restoration of the equity homeowners may have in their property prior to the storm.

It is intended to help communities rebuild, not simply build homes. The overall effort from extending assistance and forbearance through the regulatory process to financial institutions, as well as extending assistance to homeowners who are now displaced from their property, is a massive long-term effort, which will require the work of this Congress, I suspect, for years to come.

To those who are concerned about Louisianans rebuilding in circumstances which are less than desirable, we share the view. Only when levee restoration is complete, only when environmental remediation is complete will the rebuilding begin, and then to the highest hurricane standards available and applicable for our circumstance.

But make no mistake. Because of the vital nature of the energy industry, the aquaculture industry, the shipping and exporting business, which is conducted through one of the world's largest ports, the Baton Rouge/New Orleans, there is an evident and obvious necessity for people to return to the great city of New Orleans and the surrounding area because of the jobs that are necessary to provide the rest of the Nation with energy independence and the abundance of natural resources which our State produces.

Accordingly, the bill now before us is an important measure to help provide that economic stability going forward. It is a small part of a much larger package, but there is a plan, coming through in various pieces through each of the appropriate committees, to respond to the needs of the people of Louisiana in an appropriate and professional manner.

I simply ask the indulgence of those people in Louisiana who are still dealing with FEMA, living in a trailer, not certain about tomorrow, to understand the Congress is responsive to their concerns, and over the course of the next several weeks, actions will be taken we hope all will find appropriate and responsive.

Mr. Speaker, I yield back the balance of the time.

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