Boosting the chances for enactment of financial reform this year, House Banking Committee leaders have agreed to merge conflicting bills and vote on consensus legislation early next month.
"We have agreed to work together over the next several weeks," Rep. Jim Leach, the committee chairman, and Rep. John J. LaFalce, the ranking Democrat, said in a joint statement. "While there will be several issues on which we may not concur, we believe there is agreement on the vast majority of provisions of the proposed legislation."
The Banking Committee tentatively scheduled a March 4 vote on the compromise.
Aides to the lawmakers said decisions have not been made on how to settle wide differences on operating subsidiaries, unitary thrifts, community reinvestment requirements, and other issues.
Any unresolved issues would be set aside for debate during the committee vote, Rep. Leach said.
Industry officials were upbeat.
"A big step will be if this bill comes out of the committee with a strong, bipartisan vote," said Edward L. Yingling, chief lobbyist for the American Bankers Association. "It will send a big message and really move the thing forward."
"That means we are going to have a very strong, bipartisan House floor vote," said Annie Hall, government relations director for Bank One Corp.
Treasury Secretary Robert E. Rubin declined to endorse the compromise. "It depends on what it has in it," he told reporters.
Three days of financial reform hearings, which concluded with Mr. Rubin's testimony Friday, showed that Federal Reserve Board Chairman Alan Greenspan, who supports the Leach bill, and the Treasury Department are as dug in as ever. The two disagree whether to limit new financial powers to holding company units or let bank subsidiaries exercise them, too.
Mr. Rubin heartily defended placing new powers in bank subsidiaries, which the Treasury oversees through the Office of the Comptroller of the Currency. He renewed last year's threat of a presidential veto if the Treasury is not accommodated.
Mr. Greenspan told the committee Thursday that he prefers Fed-supervised holding company units because they are safer and not subsidized by the government, as are bank subsidiaries.
Rep. Leach said that lawmakers and financial industry executives are losing patience with the regulators.
"We may have to work it out ourselves," the Iowa Republican said.
Mr. Rubin agreed to meet with Mr. Greenspan and lawmakers to work on a compromise, but he suggested that the Treasury has nearly run out of concessions. Mr. Rubin emphasized that he has agreed to sacrifice insurance underwriting powers for bank subsidiaries and share rulemaking authority over them with the Fed. He also revived an offer to require the largest banks to have a holding company structure so that the Fed retains oversight powers even if banks put new activities in subsidiaries.
Mr. Rubin supported Rep. Leach's bans on banks' and commercial businesses' owning each other, as well as on nonfinancial activities for new unitary thrift holding companies.
Ellen S. Seidman, director of the Office of Thrift Supervision, which is a unit of the Treasury, defended the safety of unitary thrifts and opposed curtailing them. She said commercial firms had infused more than $3 billion in 79 failed thrifts during the 1980s crisis.
"Historically, you can say the unitary thrift, on balance, has been beneficial," she said.