< Back to H.R. 2511 (105th Congress, 1997–1998)

Text of To prohibit the Student Loan Marketing Association from conditioning the waiver of redemption premiums, otherwise chargeable in connection with the ...

...connection with the refinancing of securities acquired by the Association while it was a government-sponsore

This bill was introduced on September 18, 1997, in a previous session of Congress, but was not enacted. The text of the bill below is as of Sep 18, 1997 (Introduced).

Source: GPO

HR 2511 IH

105th CONGRESS

1st Session

H. R. 2511

To prohibit the Student Loan Marketing Association from conditioning the waiver of redemption premiums, otherwise chargeable in connection with the refinancing of securities acquired by the Association while it was a government-sponsored enterprise, on the use of its own investment banking subsidiary.

IN THE HOUSE OF REPRESENTATIVES

September 18, 1997

Mr. SKAGGS introduced the following bill; which was referred to the Committee on Education and the Workforce


A BILL

To prohibit the Student Loan Marketing Association from conditioning the waiver of redemption premiums, otherwise chargeable in connection with the refinancing of securities acquired by the Association while it was a government-sponsored enterprise, on the use of its own investment banking subsidiary.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. FINDINGS AND PURPOSE.

    (a) FINDINGS- The Congress finds as follows:

      (1) The Student Loan Marketing Association (hereinafter referred to as the ‘Association’) was established as a government-sponsored enterprise, but is now being transformed into a wholly private business entity.

      (2) The Association has established a subsidiary (Educational Securities, Inc.) that functions as a finance broker dealer which competes with other such dealers with regard to financing of higher education.

      (3) While it was a government-sponsored enterprise, the Association purchased for its own portfolio tax-exempt municipal bonds issued by various educational institutions.

      (4) The Association has informed some of the institutions issuing such bonds that it will waive redemptions premiums otherwise chargeable in connection with refunding such bonds if the institutions agree to retain the Association’s subsidiary to carry out such transaction.

      (5) To the extent that such a condition involves securities obtained by the Association during the period when it was a government-sponsored enterprise, such requirement constitutes unfair competition with other broker dealers who have not been associated with government-sponsored enterprises.

    (b) PURPOSE- The purpose of this Act is to prohibit the Association from engaging in the practice described in subsection (a)(4).

SEC. 2. PROHIBITION AND REGULATIONS.

    (a) PROHIBITION- Beginning on the date of the enactment of this Act, the Association, and any other entity obtaining securities from the Association pursuant to a restructuring of the common stock ownership of the Association under section 440 of the Higher Education Act of 1965, shall not engage in the practice described in section 1(a)(4) with respect to any securities acquired by the Association prior to January 1, 1997.

    (b) REGULATIONS- The Secretary of the Treasury shall issue regulations to implement this Act.