OMB COST ESTIMATE
FOR PAY-AS-YOU-GO CALCULATIONS

Report No: 495
Date: 11/29/99

1. LAW NUMBER: P.L.106-102 (S. 900)
2. BILL TITLE: Gramm-Leach-Bliley Act
3. 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.
4. OMB ESTIMATE:

	(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.

5. CBO ESTIMATE:

	(Fiscal years; in millions of dollars)
	1999	2000	2001	2002	2003	2004
Net costs....................	0	-35	-41	-31	-28	-31

6. EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:

OMB and CBO have different estimates of FHLBs' income levels.

7. CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATIONENACTED TO DATE:

	(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