On the eve of Senate consideration of the credit union bill, the Clinton administration threatened a veto Thursday if lawmakers use the legislation to repeal community reinvestment requirements for small banks.
The official statement of administration policy singled out an amendment planned by Sen. Richard C. Shelby, R-Ala., that would exempt banks under $250 million of assets from the Community Reinvestment Act.
"If (the bill) were presented to the President with such an amendment, the Secretary of the Treasury would recommend that the President veto the bill," the statement said.
The Senate could begin debate Friday on the bill, which would ease membership limits on credit unions as well as impose stricter supervisory and commercial lending requirements. A vote is unlikely until early next week. The House passed a more lenient version on April 1.
It was unclear whether the veto threat applied to other anticipated amendments, but the statement said the administration "strongly opposes" any efforts to strip the Senate bill of its key provisions.
Sens. Chuck Hagel, R-Neb., and Robert F. Bennett, R-Utah, circulated a plan Tuesday that would tighten the bill's restrictions on business lending by credit unions.
"The administration sees no safety-and-soundness basis for an amendment that would limit the ability of credit unions to make business loans to their members," the statement said. "Existing safeguards, coupled with the new capital and other reforms in the bill, are sufficient."