Six major banking companies are promoting a compromise on financial reform legislation that focuses on the insurance provisions.
The group - Chase Manhattan Corp., Citicorp, Fleet Financial Group, First Union Corp., Mellon Bank Corp., and Norwest Corp. - wants changes in nine key areas of the bill the House expects to vote on next month.
"We would like to support the bill," said L. Thomas Block, Chase's chief lobbyist. "Here is a road map to getting our support ... We think there are a lot of similarly minded banks."
The plan labels as "the highest priority" changes to provisions governing bank insurance sales that would weaken state insurance commissioners' regulation of banks. The banks also want to be able to underwrite life insurance and provide merchant banking services through direct subsidiaries. Contrary to the American Bankers Association's position, these banks also said lawmakers should not impose any curbs on the thrift charter.
But prospects for enactment this year remain slim.
Even if the bill is approved by the House, Senate Banking Committee Chairman Alfonse M. D'Amato said Wednesday that time is running out. Only 97 days remain in the Senate 1998 schedule, which is abbreviated by long breaks for reelection campaigning.
It is "rather doubtful, given Senate rules and procedures, that ... we could get that kind of package through," the New York Republican said.
Just two weeks ago, Sen. D'Amato said that the megamerger deal between Citicorp and Travelers Group could prompt Congress to restructure financial services laws this year. Still, Sen. D'Amato pledged Wednesday to hold hearings on financial reform this summer.
Ever hopeful, Mr. Block said that "a bill could move quickly" if a consensus develops. "If there isn't a final bill this year, this is clearly laying the groundwork for next year."
Edward L. Yingling, the ABA's chief lobbyist, said the six banks may be giving up too much too soon.
"There is nothing contrary" to the ABA position, Mr. Yingling insisted, but "it is just a question of whether all those fixes go far enough."
Insurance industry leaders reacted negatively.
Carroll Campbell, chief executive of the American Council of Life Insurance, said his group would oppose any bill that lets bank subsidiaries underwrite insurance. The ACLI said it fears some lawmakers may try to impose community reinvestment requirements on insurance companies.
The House Banking Committee was noncommittal about the bankers' plan. "These proposals are being reviewed along with a number of other suggestions for changes to the bill," a committee spokesman said.
House Banking Chairman Jim Leach said Republican leaders still plan to bring the bill to the floor during the week of May 4, but added that the timetable will be continually reassessed.
The House first tried to pass financial reform on March 31, but the bill was yanked from the floor under heavy opposition from banks and the Clinton administration.
