OMB COST ESTIMATE
FOR PAY-AS-YOU-GO CALCULATIONS
Report No: 495
Date: 11/29/99
- LAW NUMBER: P.L.106-102 (S. 900)
- BILL TITLE: Gramm-Leach-Bliley Act
- BILL PURPOSE: To increase competition in the financial services industry byauthorizing the creation of financial holding companies to facilitate affiliation amongbanks, securities firms, and insurance companies.
- OMB ESTIMATE:
- CBO ESTIMATE:
- EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:
- CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATIONENACTED TO DATE:
| (Fiscal years; in millions of dollars) | ||||||
| 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |
| Net costs..................... | 0 | -15 | -106 | -106 | -106 | -106 |
P.L. 106-102 requires Federal Home Loan Banks (FHLBs) to replace their $300 millionannual payment for the interest on bonds issued by the Resolution Funding Corporation(REFCORP) with an assessment set at 20 percent of the FHLBs' net income. BecauseTreasury pays the difference between total interest on REFCORP bonds and the FHLBs'contribution, the increase in FHLBs' payments reduces Treasury's required payments. OMB estimates that this provision will increase the FHLBs' interest payment and reducethe Treasury's payment by $440 million over five years. The Act also contains a numberof provisions that impact Federal regulatory activities funded by offsetting feecollections, which result in no net budgetary impact.
| (Fiscal years; in millions of dollars) | ||||||
| 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |
| Net costs.................... | 0 | -35 | -41 | -31 | -28 | -31 |
OMB and CBO have different estimates of FHLBs' income levels.
| (Fiscal years; in millions of dollars) | ||||||
| 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |
| Outlay effect.............. | 53 | 715 | 955 | 581 | 800 | -88 |
| Receipt effect............ | -5 | 3,659 | 1,779 | 769 | 1,985 | 37 |
| Net costs.................... | 58 | -2,944 | -824 | -188 | -1,185 | -125 |
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