WASHINGTON -- The chances for interstate branching legislation this year appeared to die Wednesday as insurance and banking groups conceded they could not bridge their differences.
"We got 95 yards there, but we just weren't able to make it the last five," said Fred Martin, senior vice president and director of government relations for BankAmerica Corp., one of the banks pushing hard for authority to branch across state lines.
Compromise Was Awaited
Congress had indicated it would not act on legislation unless the banking and insurance industries could craft a compromise. With time running out for this legislative session, negotiators had set Wednesday as the deadline for hammering out an agreement.
"It was a good-faith process and everybody tried very hard," said Mr. Martin. "There just isn't time left this year to do it."
However, Paul Equale, chief lobbyist for the insurance agents, charged that some of the banks had not been serious about reaching a deal.
"They continually brought issues back to the table that had previously been resolved," he said. "There could be no other motive than to scotch the deal."
A spokesman for the House Banking subcommittee on financial institutions said the panel would make an announcement today about whether it would try to continue despite the discord among the banks and insurance agents.
The negotiations were between six big regional holding companies and the Independent Insurance Agents of America. In return for the agents' support on branching, the regionals were prepared to accept some restrictions on bank insurance activities.
However, the nature of those restrictions apparently prevented the two groups from agreeing.
The agents were reported to be seeking language that would limit the authority of regulators to approve insurance activities deemed "incidental to banking," for example. Many banks regard such activities, which include credit life insurance, as too important to sacrifice.
Curb on Citicorp Was Sought
The insurance agents had also hoped to limit the ability of Citicorp and other large banks to sell insurance nationwide from Delaware.
But even if the insurers and regional banks had reached a compromise, branching legislation still would have been a long shot. American Bankers Association, for example, probably would not have supported the emerging bill because it contained restrictions on insurance activities.
The Independent Bankers Association of America, a longtime opponent of branching because it might increase competition for small banks, expressed considerable interest in the measure after the Department of the Treasury suggested limits on branching authority and promised to help gain relief from some regulations the industry regards as burdensome.
However, at least three of the regional banks refused to go along with the branching limits suggested by the Treasury.
Members of the Group
The bank group consisted of BankAmerica Corp., Nations-Bank Corp., Fleet Financial Group Inc., Chemical Banking Corp., First Interstate Bancorp, and Norwest Corp.
Although BankAmerica's Mr. Martin said the coalition had decided to delay efforts until next year, opponents of the pact said they planned to keep a close eye on the issue.
"A lot of people put a lot of time and effort into this, and you have to wonder if they're all really going to give up," said Sam Baptista, president of the Financial Services Council.