With a House vote on financial reform expected next week, the Bankers Roundtable Friday offered its own rewrite of the legislation.
Though ostensibly based on the bill approved by the House Rules Committee March 30, the Roundtable's plan includes major revisions that would be widely opposed by key lawmakers, other banking trade groups, and insurance industry officials.
"What is the punch line? This is not a funny joke," said Jack Dolan, a spokesman for the American Council of Life Insurance. "It is pretty late to be offering a dream bill. This doesn't add anything useful."
But Roundtable lobbyist Alfred Pollard disagreed. "We simply want to lay out what it will take to get the banking industry's support for legislation this year," he said.
The Roundtable proposal would retain the Comptroller of the Currency's advantage in federal suits by leaving untouched the so-called deference doctrine, which means federal judges do not overturn regulatory decisions unless the agency committed significant legal errors. The House bill would eliminate this advantage.
The plan would drop consumer protection provisions covering banks' securities and insurance sales, and bank operating subsidiaries could engage in any activity that is "financial in nature," including insurance underwriting. The Rules Committee bill would bar subsidiaries from any underwriting businesses that banks cannot enter directly.
Banc One Corp. lobbyist Annie Hall, who has tried to work out a compromise with the insurance industry, called the Roundtable's plan "unfortunate." She said it demonstrates that the group "is not engaged" in negotiations over the bill.