Lawmakers aim to wrap up 2 banking bills next week.

WASHINGTON -- With time running short, House and Senate banking committee members hope to meet Tuesday to hammer out the final details of two major banking bills.

The Tuesday conference, which is expected to deal with interstate branching legislation and the community development financial institutions bill, has been rumored on Capitol Hill since the beginning of the week. On Thursday, key House Banking Committee aides expressed confidence that the long-postponed conference would finally be held.

In addition. congressional sources said, White House chief of staff Leon Panetta has told Hill leaders that the interstate bill is an administration priority.

Quick Action Sought

Mr. Panetta was said to have asked for quick action on the measure.

Although committee aids have reached agreement on many of the differences between the House and Senate MIls, some issues are still being negotiated.

Chief among them is the treatment of foreign banks. Both the interstate bill and the development bank measure have provisions that attempt to eliminate what their sponsors view as disparities in the treatment of U.S. and foreign institutions.

The community development bank package includes the Fair Trade in Financial Services bill, which gives banking agencies the power to reject applications from banks whose home countries discriminate against U.S. institutions.

The Fair Trade bill was sponsored by Senate Banking Committee Chairman Donald W. Riegle and enjoys broad support in the banking industry. It has also been endorsed by the Clinton administration.

The House Ways and Means Committee is unhappy with the measure, though, because it gives the Treasury Department authority to decide which countries discriminate - power its members think should reside with the U.S. Trade Representative.

Powerful Opponent

House Energy and Commerce Committee Chairman John D. Dingell feels the same way and is expected to oppose the bill in conference. Opposition from the chairmen of both Energy and Commerce and Ways and Means could be fatal.

However, Ways and Means Committee Chairman Sam Gibbons met with Treasury Secretary Lloyd Bentsen on Thursday, and there was considerable speculation that the two had worked out a compromise.

Fair Trade's fate is linked, in part, to the action taken on a foreign bank measure in the interstate bill. Some observers expect the conferees to take one measure, but not both.

The interstate bill includes a provision sponsored by Sen. Wendell H. Ford, D-Ky., that requires foreign institutions to branch from U.S.-chartered banks, rather than from their overseas headquarters.

Foreign banks, with considerable support from their U.S. counterparts and the Clinton administration, have protested, arguing that it amounts to a violation of national treatment - the notion that all institutions should be treated the same.

CRA Provision Floated

The Senate is proposing to drop that provision, and instead simply subject foreign banks to the Community Reinvestment Act. A key House aide called the Senate offer "a non-starter" and predicted it would be soundly rejected by the House.

However, consumer groups began pressing the House on Wednesday to accept the Senate measure.

"There is no sound rationale for excluding foreign wholesale banks form the scope of CRA," the groups said in a letter to House Banking Committee Chairman Henry B. Gonzalez, D-Tex.

"CRA is an elaboration of the principle that banks are chartered to meet the 'convenience and needs' of the communities they serve."

The groups, which included the Association of Community Organizations for Reform Now and the Consumer Federation of America, said U.S. wholesale banks, such as J.P. Morgan & Co. are already covered by CRA and foreign wholesale banks should be treated the same.

Also up in the air is an amendment sponsored by Rep. Gonzalez that would reinstate a Texas law barring home equity loans. The law was struck down by federal courts.

Rep. Gonzalez is expected to be opposed in the conference by a fellow Texan, Republican Sen. Phil Gramm.

Low-Income Lending Plan

Many of the most difficult issues have been worked out, including language that will divert at least a third of the money in the community development bill to a program that gives banks incentives to lend in low-income communities.

The Clinton administration had vigorously resisted the measure, which would fund the Bank Enterprise Act. But Rep. Floyd Flake, D-N.Y., hammered out a deal with Sen. Christopher J. Dodd, D-Conn, the swing vote among Senate conferees.

The House approved the provision by a wide margin, and was expected to back it firmly in conference.

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