WASHINGTON -- The Senate Banking Committee has drafted omnibus legislation that links regulatory relief for banks and thrifts to President Clinton's community development bank proposal.
Among other provisions, the bill would end the system in which banks are subject to examinations by more than one agency, substituting a single exam.
More small banks would qualify for the 18-month examination cycle instead of annual exams, and agencies would be directed to eliminate requests for duplicative information.
Mechanism for Appeals
The agencies would be required to establish an intra-agency mechanism to permit depository institutions to appeal examiner decisions. And the Federal Reserve would be directed to study the issue of whether to pay interest on reserves.
The regulatory relief provisions could be substantially revised--or even dropped -- before the draft is put before the committee for a vote. But banking industry sources expressed optimism that Senate Banking Committee chairman Donald W. Riegle Jr., D-Mich., would ask his panel to vote on a package that includes a number of small but significant steps toward reducing burdensome regulations.
"If you look at what isn't there. you can see he's whittled the package down" to include only the least controversial items, said Stephen J. Verdier, a lobbyist for the independent Bankers Association of America.
Riegle Support Seen
A spokeswoman for the banking committee said no decision has been made on what kind of bill to place before the panel. But other sources with close ties to the committee said Sen. Riegle has decided to include regulatory relief.
The legislation, which appears to represent a compromise between Sen. Riegle and the banking committee's ranking Republican, Sen. Alfonse M. D'Amato of New York. could come up for a committee vote as early as Sept. 21.
Most of the provisions represent small steps. Business deposit accounts would be exempted from the Truth-In-Savings Act's disclosure requirements, and business loans would be exempted from the Real Estate Settlement Procedures Act.
I would characterize all of the items in the bill as a lot of little things, but that's what regulatory, burden is -- an accumulation of little things," said the IBAA's Mr. Verdier.
Trouble in the House?
The bill that is shaping up would include four major sections, or titles. In addition to the sections on regulatory relief and community, development banks. the bill would include a provision aimed at creating a secondary market in small-business loans and another intended to crub abuses in the home equity loan market.
While the package would likely broad support in the Senate, it could run into problems in the House. Two senior members of the House Banking committee have developed their own legislative approaches to small-business loan securitization, and they might resist efforts to accept the Senate
|A Lot of Support'
The Senate measure was drafted by Sen. D'Amato. and he is likely to fight tooth and nail for his version.
In addition. House Banking committee chairman Henry B. Gonzalez, D-Tex., is expected to oppose efforts to scale back bank regulation. However. the banking industry can probably count on many other members to support regulatory relief.
"There is a lot of support for this type of thing in the House." said Edward L. Yingling, chief lobbyist for the American Bankers Association.
Other provisions in the draft Senate bill would:
* Permit banks to file currency transaction reports electronically.
* Reduce the advance notice period for branch closings to 30 days from 90, but include automated teller machines.
* Repeal a provision of the 1991 banking law that requires regulators to set guidelines establishing a minimum ratio of market value to book value for bank stocks.
