WASHINGTON -- The House and Senate appear to be moving quickly toward negotiations on interstate branching legislation, raising the prospect that it could be ready for President Clinton's signature by Memorial Day.
Staffers have already begun meeting on the bill, and congressional and industry sources said last week that a formal conference committee meeting could begin the week of May 16. Although the timetable would then be tight, it would permit floor votes before the Memorial Day recess at month's end.
House Banking Committee Chairman Henry B. Gonzalez, D-Tex., is scheduled to chair the conference. However, Rep. Stephen L. Neal, D-N.C., chairman of the House Banking subcommittee on financial institutions, is expected to lead House efforts on the bill. Rep. Neal has been the legislation's strongest advocate.
Starting Date
Among the differences between the House and Senate bills that must be reconciled in conference is the date on which branching can begin.
The House bill would permit banks to make acquisitions across state lines one year after enactment and to begin converting banks into branches six months later. The Senate bill permits consolidation after June 1, 1997.
One compromise being discussed would apply the House version to states whose legislative bodies meet every year and the Senate variation to states whose lawmakers gather every other year.
The rationale for the Senate language was that states whose legislatures do not meet each year need more time to take advantage of the "opt out" provision in the bill - the escape clause that permits states to bar branching within their borders.
'Definitional Problems'
Large regional banks that supported interstate are pressing for the House version, but state bank supervisors and others want the longer timetable in the Senate version.
"There are definitional problems in working with two schedules," said James B. Watt, president of the Conference of State Bankk Supervisors. "Three years is a good, clean approach."
Also up in the air is the approach to state regulation of branches of out-of-state national banks. The House bill gives state regulators considerably more power to regulate those branches, bank lobbyists say.
Similar Treatment Feared
Also, some large domestic banks are concerned about a Senate provision requiring foreign institutions to branch through U.S. based subsidiaries rather than overseas offices.
U.S. banks are concerned that they may get hit with similar requirements in their overseas operations, according to congressional aides working on the bill.
However, Sen. Wendell Ford, D-Ky., argued that foreign banks have an advantage over U.S. institutions in that they are not always subject to the same laws and regulations, including fair lending laws and the Community Reinvestment Act.
Senate Banking Committee Chairman Donald W. Riegle, D-Mich., agreed with Sen. Ford, saying he would fight to preserve the Senate language.
