subsequently-retain-on-any-security-fother-than-exemptedsecurity-and-to-the-amount-of-eredit-(regardless-of-whe

or-where-the-borrower-may-bet-that-any-person-may-initially

extend-and-subsequently-maintain-on-any-security-(other-than-an

exempted-security).

It-shatt-be-unlawful-for-any-person-know

ingly-to-obtain-or-retain-eredit-in-any-amount-in-violation

of-any-rule-or-regulation-under-this-section,-and-it-shalt

be-unlawful-for-any-person--whether-or-not-knowingly,-to obtain-or-retain-eredit-in-an-aggregate-amount-exceeding-

$1,000,000-at-any-one-time-in-violation-of-any-rule-or-regulation

under-this-section."

(b)--The-amendment-made-by-subsection-fat-of-this

section-does-not-affeet-the-continuing-validity-of-any-rule or-regulation-under-section-7-of-the-Securities-Exchange-Aet of-1934-in-effect-prior-to-the-effective-date-of-the-amendment.

" (£) It shall be unlawful for any United States

person to receive a loan or extension of credit for the purpose of purchasing or carrying securities from an office or other place of business of any lender, which office or place of business is not located in any State, if such lender, had such office or place of business been located in any State, would have been prohibited from making such loan by the pro

visions of this section or the rules and regulations

thereunder.

For the purpose of this subsection, the term 'United States person' shall have the meaning ascribed to it by section 4920 (a) (4) of the Internal Revenue Code as in effect on April 1, 1970; provided, however, that the Board of Governors of the Federal Reserve System may by rule or regulation specify that any class or classes of persons shall not be treated as 'United States persons for the purpose of this subsection.

Notwithstanding the

provisions of section 29 of this title, the provisions of this subsection shall not be construed to affect the

validity of any loan or extension of credit."

Whenever the Secretary issues any regulation,

or exemption from any regulation, requiring any person to keep any records or report any transactions under any title of this Act, such regulations and exemptions

46-824 O 70 - 15

shall apply to such classes of persons, and not

to any particular persons, as the Secretary shall

prescribe.

Such classes shall be reasonably defined

in the light of the purposes of this Act.

$ 502. Requirement of hearing, etc.

Whenever the Secretary issues any regulation,

or revokes any exemption from any regulation, requiring any person to keep any records or report any transactions under any title of this Act, such regulations shall be made on the record after an agency hearing pursuant to sections 7 and 8 of the Administrative Procedure Act. Such regulations shall constitute final agency actions for purposes of judicial review.

(a) Except as otherwise provided in this section, this Act and the amendments made thereby take effect on the first day of the seventh calendar month which begins after the date of enactment.

(b) The Secretary of the Treasury may by regulation provide that any provision of title I or II or any amendment made thereby shall be effective on any date not

earlier than the publication of the regulation in the Federal Register and not later than the first day of the thirteenth calendar month which begins after the date of enactment.

(၁)

The Board of Governors of the Federal Reserve

System may by regulation provide that the amendment made by title III shall be effective on any date not earlier than the publication of the regulation in the Federal Register and not later than the first day of the thirteenth calendar month which begins after the date of enactment.

(d) The Securities and Exchange Commission may by regulation provide that the amendment made by title IV shall be effective on any date not earlier than the publication of the regulation in the Federal Register and not later than the first day of the thirteenth calendar month which begins after the date of enactment.

Senator PROXMIRE. Mr. Desch, I have a number of questions, but I will only ask four of them and the rest I would appreciate if you could answer for the record when you correct your remarks. You can do that in writing. (Questions and answers appear on p. 223.) Most of your objection to S. 3678 revolves around what could happen if the Secretary wrote unreasonable or unduly onerous regulations. Couldn't the same objection be raised against practically any legislation on which the Congress relies on the judgment of the administrative agency to carry out the policy of Congress?

Mr. DESCH. Perhaps so, but there are certain standards that we feel should be established. There are some known former Secretaries of the Treasury and others that have not been particularly happy with commercial institutions or financial institutions. We shudder to think of the broad gaged impact this legislation could have if such a person were Secretary of the Treasury.

Senator PROXMIRE. Last week several prominent members of your organization testified on the one bank holding company bill. They all seemed to agree that Congress should delegate broad authority to the administering agencies to define the activities in which bank holding companies could engage.

There was also agreement that the agencies should not be encumbered with specific restrictions or prohibitions.

Why are you willing to trust the banking agencies in this area and not willing to trust the Secretary of the Treasury in the recordkeeping area?

Mr. DESOH. We don't say that we don't trust the Secretary of the Treasury. We just say we don't think Pandora's box should be permitted to become a piece of legislation.

Senator PROXMIRE. Isn't this an inconsistency in this position? You would give the same discretion that you advocate for one bank holding company legislation to the Federal Reserve Board and the other regulatory agencies; yet you would not give that same kind of discretion in this case to the Secretary of the Treasury.

Mr. DESCH. I don't believe there is an inconsistency. I think what we are trying to say about the foreign bank secrecy bill is that certain reasonable standards should be established. We think the one bank holding company legislation, with which I am not quite as familiar, should also establish certain standards without necessarily writing a laundry list. This is the objective in our commentaries.

Senator PROXMIRE. That is what we hope to do, we want to avoid the laundry list. Most of the people in your industry have very strongly and strenuously objected to the laundry list that the House put in their bill. We are interested in this committee in the views of your industry in that respect.

But I wonder if you are inconsistent here.

Mr. HABERKERN. Senator, I would like to say, for example section 206 of the bill is quite unlike ordinary legislation in that it seems to invite discrimination. It says "any such exemption may be conditional or unconditional by regulation, order or licensing, or any combination thereof, may relate to any particular transactions, to the type or amount of the transaction, to the"

Senator PROXMIRE. Where is this, again, sir?

Mr. HABERKERN. On page 12,, in the middle of the page, section 206. So, I would point out to you, sir, that there is quite a difference between the one bank holding company legislation that has been dis