Today's House floor debate on financial reform is not expected to be contentious.
Lawmakers have filed more than 70 amendments for consideration, but the House Rules Committee was expected to vote Wednesday to exclude most of them. In particular, the committee was leaning against allowing a tough Democratic privacy proposal or any amendments on unitary thrifts.
"The strategy of the leadership has been to get these issues resolved in the Rules Committee, not on the floor," said Paul A. Schosberg, the president of America's Community Bankers. "They are trying to head off floor amendments that are so divisive that they jeopardize the bill overall."
Under GOP leaders' ideal scenario, the House would adopt a bipartisan compromise on privacy favored by the financial services industry. That would leave only one key issue-the turf battle between the Federal Reserve Board and Treasury Department over granting direct subsidiaries of banks broad powers.
The bill would let bank subsidiaries underwrite securities and do merchant banking while barring them from insurance underwriting or real estate development. The Clinton administration has threatened a veto if subsidiary powers are weakened, but Commerce Committee Chairman Thomas J. Bliley Jr., R-Va., wants to limit them to sales and other lower risk activities.
But on Wednesday he said he would not offer that amendment, choosing instead to rely on House-Senate negotiators to ultimately choose the tighter restrictions in the Senate bill.
"The deck was stacked and I will work to repeal op subs vigorously in the conference," he said. "It was stacked that it would go down and make my work harder in conference."
The fate of the bill could turn on a split among Democrats over privacy.
Rep. Edward J. Markey of Massachusetts and other Democrats will urge Rules Committee Chairman David Dreier to let them offer an amendment that would give customers the right to block their financial institutions from sharing confidential information with affiliates.
But Rep. John J. LaFalce of New York, the ranking Democrat on the House Banking Committee, and other moderates are backing a bipartisan compromise that would let customers block information shared with third parties for marketing purposes but leave affiliate sharing unhindered.
If his amendment is shunned, Rep. Markey and others are expected to challenge the rule sent to the full House that determines what amendments are allowed. "It is going to be a huge debate," said Larry LaRocco, managing director of the ABA Securities Association.
The financial reform bill would be stopped cold if the rule fails, but many observers predicted the privacy hawks do not have enough votes.
"The indications are he (Rep. Markey) doesn't have the complete support of the Democrats," said Stephen A. Blumenthal, vice president of Schwab Washington Research Group. "Most of them recognize the Markey amendment is a bill killer."
Rep. Leach said he is optimistic the rule will be approved and the reform bill will be brought to the floor.
