UNDER SECRETARY

DEPARTMENT OF THE TREASURY                                     WASHINGTON                                     May 5, 1997

The Honorable Tim Johnson
United States Senate
Washington, D.C. 20510

Dear Senator Johnson:

Thank you for requesting the Treasury's views on S.652, the Depository Institution Disaster Relief Act of 1997, which seeks to speed the recovery of areas flooded by the Red River of the North in Minnesota, North Dakota, and South Dakota.

In 1992 and 1993, Congress passed similar legislation in response to natural disasters. Like those bills, S.652 would permit the federal regulators of banks, savings associations, and credit unions to make temporary exceptions to statutes and regulations that may hamper the reopening of these institutions, slow down the lending process, and reduce the availability of credit. This authority is intended to facilitate providing much needed financial services to disaster victims, and would have no adverse effect on the safety and soundness of depository institutions.

We share Congress's interest in assisting the victims of natural disasters and support the passage of S.652.

Sincerely,

/s/

John D. Hawke, Jr.
Under Secretary for Domestic Finance