WASHINGTON - House Banking Committee aides worked furiously Thursday to redraft a provision in the regulatory relief bill that had alienated banking industry supporters.
Committee aides said that the provision, which bars the Comptroller of the Currency from approving new bank insurance powers, would not be changed substantively.
However, the staffers said that the language would be reworked to make it clear that the ban only applies to future powers and is not intended to restrict activities already permissible for banks.
Insurance industry representatives said they hoped the new language would bring over the votes needed to pass the regulatory relief bill - which had been a top bank industry priority until the insurance provision was added.
"I'm very optimistic," said Paul Equale, chief lobbyist for the Independent Insurance Agents of America. "It isn't soup yet, but all the ingredients are there," Mr. Equale said.
However, bank lobbyists were skeptical that banking committee aides could develop language protecting existing powers without alienating the insurance agents.
"Anything that would be a prospective freeze - as opposed to rollback - would simply not be acceptable to the agents," said one bank lobbyist.
A number of bank lobbyists said they doubted that any provision which satisfied the agents would be acceptable to them.
On the House Banking Committee's second day of deliberations on regulatory relief legislation, deliberations slowed to a crawl as Democratic lawmakers retaliated for the way Republicans handled an unrelated floor vote Wednesday.
Republicans, anxious to leave town for a party fund-raiser in New York, stopped a vote before two Democrats could be recorded. The amendment, sponsored by Democrats, failed by a single vote.
Rep. Bruce Vento, D-Minn., requested that amendments to the regulatory bill be read in their entirety. Ordinarily, the clerk reads only the title of the amendment.
The delaying tactics, which were said to have been directed by House Minority Leader Richard Gephardt, were employed at other House committees as well. However, it appeared late Thursday that the delays ensured that the committee deliberations would not conclude until next week.
The deliberations "are moving at a pace that can't be described as alacrity," said House Banking Committee Chairman Jim Leach, R-Iowa.
In other action Thursday afternoon, the committee rejected an amendment offered by Rep. Jerry Weller, R-Ill., that would have expanded a provision exempting small banks from the Community Reinvestment Act. Rep. Leach and Rep. Doug Bereuter, the sponsor of the relief bill, both opposed the amendment.
Rep. Weller then offered a second version of his amendment, sparking a lengthy and heated debate on the merits of the 1977 reinvestment law, which included an angry diatribe from Rep. Vento.
"Yes, some banks may be inconvenienced by the paperwork, but that's because there is a problem in society today," Rep. Vento said.
Rep. Maxine Waters also jumped into the fray.
"For me to have to argue with people who say, literally, 'I don't believe you, there is no redlining ... is quite burdensome,'" the California Democrat said. "Exclusion, racism, and discrimination still exist."
Two members - Rep. Richard Baker, R-La., and Rep. Rick Lazio, R-N.Y. - are expected to offer amendments that would allow banks to affiliate with insurance companies in states without laws prohibiting such combinations.
"We're real close to getting the votes" for passage of the Baker amendment, said one financial services lobbyist.
The lobbyist added that he preferred the Baker approach because the Lazio amendment would give the Federal Reserve broad discretion to determine what types of insurance companies banks could affiliate with.