Senate banking panel, Treasury start interstate-branching talks.

WASHINGTON - An impatient Senate Banking Committee on Wednesday prodded the Clinton administration into beginning negotiations on legislation that would authorize interstate branching but probably limit bank insurance powers.

Committee Chairman Donald W. Riegle Jr., D-Mich., said he wants his panel to vote on the bill Nov. 18 and the Senate to act next year. In a session shortened by elections and filled with major legislative issues, floor time will be tight next year, and delays could prove fatal, Sen. Riegle said.

"I know we can't get to the floor this year," he said, "but we can get it into the queue for the early part of next year."

Positions Seen as Close

Treasury Under Secretary Frank N. Newman said the administration and the Senate are very close in their positions on interstate branching. However, he added, the administration will oppose the bill if insurance restrictions are included.

Edward L. Yingling, chief lobbyist for the American Bankers Association, echoed Mr. Newman's comment, warning that the banking industry would strongly, oppose any legislation that rolls back insurance powers.

The Treasury endorsed interstate branching last month but disappointed the multistate banking companies by making it clear the administration has little enthusiasm for an immediate legislative battle.

Close to the Vest

As a result, the Treasury has given few details of its position, angering lawmakers on both sides of Capitol Hill.

"We need a little more candor," said an obviously riled Sen. Christopher J. Dodd, D-Conn. "If you think it's not a good idea and you're against it, I'd rather you tell me now than have us jump through hoops and then find out you're not behind us."

Sen. Dodd has been a strong advocate of interstate branching, as well as a key critic of bank insurance powers. The Connecticut Democrat wrote the insurance restrictions that were added to a 1991 Senate bill.

The Dodd language was dropped from the bill that was sent to the President's desk that year but will be the basis for negotiations between the Senate and the administration, according to one committee aide.

Deal for Talks to Begin

Under the agreement worked out Wednesday, aides to Sen. Riegle, Mr. Newman and Comptroller of the Currency Eugene A. Ludwig were to begin talks late that afternoon.

Although Mr. Newman protested the short period allowed for the talks, Sen. Dodd argued that the issues are not that difficult to resolve. "We've been down this road before," he said. "We've prepared legislation that covers all the points. We've passed legislation."

Sen. Dodd warned Mr. Newman and Mr. Ludwig that, if they want interstate, they will probably have to swallow insurance language they don't like.

"One of the painful lessons you learn in this town is that you don't get your way on everything," he said. "I won't abandon interstate if I lose, and I hope you won't abandon it if you lose."

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