The House Banking Committee voted 35 to 19 Tuesday to permit bank holding companies to derive 15% of their gross domestic revenues from nonfinancial activities.
That vote was the only one taken during the panel's first day of work on financial modernization legislation. The committee, expected to reconvene today at 10 a.m., still faces votes on 90 amendments to the bill.
An amendment allowing nonfinancial firms to earn a portion of their revenues from the banking business is expected to be voted on today.
During the hours of debate that preceded the vote on banking and commerce, key committee members lined up on opposite sides of a number of contentious issues that must be worked out over the next few days, including whether to eliminate the thrift charter.
Noting the divisions, House Banking Committee Chairman Jim Leach said lawmakers have an obligation to work out their differences, despite pressure from warring industry groups.
"Not every demand by every industrial group has been met, nor could or should they be," he said. "For every winner, there are losers."
Although votes on the numerous amendments will likely run through Thursday, most committee members predicted that the panel ultimately will approve a bill.
Rep. Richard Baker, R-La., who wants to remove all barriers between banks and nonfinancial firms, said he plans to vote for the final bill even if his plan fails. "It is my intent to support the bill, in order to keep the hope of reform alive," he said.
Reps. Marge Roukema, R-N.J., and Spencer Bachus, R-Ala., took similar stands. Some lawmakers, however, questioned whether the committee could reach agreement, given the lingering disputes.
Noting that Rep. Leach tweaked his bill just moments before the vote began to build more industry support, Rep. Henry Gonzalez, D-Tex., predicted the panel would not approve a bill. "I fear that we will spend the next hours and days chasing a mirage down a hot highway," he said.
