WASHINGTON - Reductions in bank paperwork and reporting requirements were approved by the Senate Banking Committee on Wednesday, but in a blow to banks, the panel did not include any changes to the Community Reinvestment Act.
Many Republican members of the committee were frustrated by the elimination of CRA provisions from the regulatory relief bill, but the threat of a presidential veto persuaded Senate Banking Committee Chairman Alfonse M. D'Amato to remove them from the bill.
"The administration has been unwilling to open the door for any CRA discussion - period. I regret this head-in-the-sand attitude," the New York Republican said.
Sen. D'Amato said he agreed to avoid CRA issues in return for the committee's bipartisan support on other regulatory relief issues.
Among the major changes in the Senate bill is a proposal to reduce the amount of consumer credit disclosures for the Truth-in-Lending and Real Estate Settlement Procedures acts. The bill also eliminates banks' exposure to civil lawsuits under the Truth-in-Savings Act.
Banks also would enjoy reductions in duplicative application, filing, and approval procedures. Also included was a provision to eliminate per- branch capital requirements for national and state banks.
Sen. Richard C. Shelby, R-Ala., one of the primary authors of the bill, said the regulatory relief bill is a significant advance for banks and their customers, despite the absence of CRA changes.
"Because this bill does much good, in my view, and I would not want to compromise its passage, I will save CRA for another day," Sen. Shelby said.
Committee Democrats were generally supportive of the bill as well. Sen. Paul Sarbanes, D-Md., the panel's ranking Democrat, said the elimination of CRA improved the bill's prospects. "I think it will be possible to move on the balance of this legislation," he said.
However, the administration still objects to some major provisions in the bill.
In a letter to Sen. Sarbanes, Treasury Under Secretary John D. Hawke Jr. criticized a provision that would allow the Federal Reserve Board to exempt institutions with assets up to $50 million from reporting mortgage data.
Currently, the exemption applies to institutions with $10 million in assets or less. "Regulators should not be free to exempt out of existence this important tool against (race and gender) discrimination," Mr. Hawke wrote.
Mr. Hawke also argued that the reg relief bill would eliminate reporting of small-business lending data and weaken supervision of foreign banks operating in the United States.
