Full text of Statements and Speeches of J. W. Barr : Statement Before the Committee on Rules, House of Representatives, on H. R. 5130

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STATEMENT OF JOSEPH W. BARR, CHAIRMAN, BOARD OF DIRECTORS
OF THE FEDERAL DEPOSIT INSURANCE CORPORATION
Before the
COMMITTEE ON RULES, HOUSE OF REPRESENTATIVES
on H.R. 5130
May 13, 1964

Mr. Chairman:

It is a pleasure to appear before this Committee

and express my views on the granting of a rule on H.R. 5130, a bill
limited to increasing the maximum insurance coverage for depositors in
insured banks and share account holders in insured savings and loan
associations.

H.R. 5130 as reported out of the House Banking and Currency

Committee contains an amendment which would increase the maximum insurance
for bank deposits and savings and loan shares to $20,000 instead of
$ 25,000 as was provided in the bill as originally introduced.
The bill as it now stands does not incorporate certain recommen­
dations of the Administration with respect to legislation to increase
deposit insurance and insurance for share accounts in savings and loan
associations.

At the end of the hearings before the House Banking and

Currency Committee on H.R. 5130 the Chairman of the Committee inserted'
for the record a letter from the Secretary of the Treasury, which stated
the views of the Administration with respect to legislation to increase
deposit insurance and insurance for share accounts in insured savings and
loan associations.

This letter, in essence, stated that legislation to

increase insurance coverage for deposits and share accounts should also
include provisions for additional safeguards for insured institutions,
including adequate requirements covering reserves and liquidity, standby
authority over maximum interest and dividend rates, and strengthened




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conflict of interest provisions.

These recommendations were based upon

recommendations in the report of the President's Committee on Financial
Institutions.
On July 8,

1963

Mr. Patman introduced H.R. 7*+04, which would

increase from $10,000 to $15,000 the maximum amount of insurance coverage
for bank deposits and savings and loan association share accounts.

This

bill also (l) prescribes liquidity requirements for member institutions
of any Federal Home Loan bank, (2) provides for standby authority for
this Corporation and the Federal Reserve Board to limit the rates of
interest which may be paid by the banks upon time and savings deposits,
(3) provides similar standby authority in the Federal Home Loan Bank
Board with respect to the payment of dividends on share accounts, (4)
extends statutory noncriminal conflict of interest provisions, now appli­
cable to Federal Reserve State member banks, to insured nonmember banks,
and (5 ) makes certain conflict of interest provisions now applicable to
insured banks also applicable to institutions which are members of any
Federal Home Loan bank.
While these proceedings were taking place in Congress I was an
official in the Treasury Department and participated occasionally in the
work of the President's Committee on Financial Institutions and I
consider the report of the Committee to be an excellent statement of
Government policy toward private financial institutions.

I endorsed

most of its conclusions on the subject matter of legislation to increase
insurance for bank deposits and share accounts in savings and loan associ­
ations.

For these reasons I would support the consideration by the House

of Representatives of H.R. 7^04 rather than H.R.



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5130.