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Public Statements

Washington, Thursday, July 26, 2007

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Location: Washington, DC

WASHINGTON, THURSDAY, JULY 26, 2007 -- (House of Representatives - July 26, 2007)

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Mr. FRANK of Massachusetts. Madam Chairman, I offer an amendment.

The CHAIRMAN. The Clerk will designate the amendment.

The text of the amendment is as follows:

Amendment No. 2 offered by Mr. Frank of Massachusetts:

Strike sections 5031, 5032, 5033, 5035, and 5036.

The CHAIRMAN. Pursuant to House Resolution 574, the gentleman from Massachusetts (Mr. Frank) and a Member opposed each will control 5 minutes.

The Chair recognizes the gentleman from Massachusetts.

Mr. FRANK of Massachusetts. Madam Chairman I yield myself 2 minutes.

This bill as presented significantly expands the ability of the Farm Credit System to operate in nonfarm contexts in two ways; first of all, in terms of the membership that would be required to be farm credit providers, and, secondly, in terms of the transactions in which they engage. And I think that would be an error. And I believe that it is a mistake to allow an expansion into the banking system by entities that aren't banks. We have a particular exemption in the Farm Credit System for agricultural lending, and it was meant to be lending by and to agricultural commodities. This bill goes beyond it.

Now, I want to say, and I have had conversations with the chairman of the Agriculture Committee, Members have said that especially with the interest in alternative energy, there have been problems in getting loans from banks. I must say that, and I talked to my colleague the ranking Republican, no one has brought this to our attention. Had this been brought to our attention on the Financial Services Committee, we would have responded. And I want to say now, and I talked to the chairman of the Agriculture Committee, I am prepared to have, I think we should have in the fall, joint hearings of our two committees, the Committee on Agriculture and the Committee on Financial Services, to listen to people's concerns here. And if it is documented that there have been problems with the availability of loans for the purpose of alternative energy for agriculture, then, yes, I would agree that something is appropriate. My problem is that this bill as it now stands goes beyond that in several ways. It weakens the restrictions in terms of stock ownership as to who gets involved.

Now, another issue that has been raised was allowing an increase in the town size, from 2,500 to 6,000. My reaction to that was favorable, but we were never able, as we were willing, to negotiate out some limitations and some expansions.

Madam Chairman, I reserve the balance of my time.

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Mr. FRANK of Massachusetts. Madam Chairman, I yield myself my remaining minute.

I know my friends have said they sought a compromise. The only problem is they had a unique motion here, it was the unilateral compromise, they compromised with themselves. And they did a pretty good job of compromising with themselves, but I think we need to compromise with each other.

There are two committees here that have concerns: one about the integrity of the banking system and not having non-banks get into the banking system. This House is aware of that because we dealt with a similar issue with regard to industrial loan corporations.

What we are saying here, the gentleman from Alabama and I, is we were not previously told about a problem of a lack of availability of credit from the banking system for alternative energy. If that exists, it needs to be remedied. And as I've said, I've spoken to the chairman of the full committee; I've spoken to my ranking member on our committee. We're prepared to have joint hearings and be available for people to document to us what the nature of the problem is, and then respond, whether it's an increase in size, or what. But I do think the history shows that we should be very careful about who gets into the banking industry and who doesn't. The banking system ought to be preserved very carefully.

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