Senate Banking Committee members are mulling a compromise to break the latest logjam on financial reform legislation, but it was unclear Thursday whether the deal is sweet enough to entice either Republicans or Democrats.
A last-minute committee vote could be scheduled for this morning, sources said, but a Senate Banking spokesman said no vote was scheduled as of Thursday afternoon.
Chairman Alfonse M. D'Amato was forced to postpone the committee's long- scheduled Sept. 3 vote after fellow Republicans demanded that the bill be stripped of every reference to the Community Reinvestment Act.
An amendment by Sens. Phil Gramm and Richard C. Shelby would have eliminated a requirement that banking units of a financial holding company maintain a "satisfactory" CRA rating or face divestiture. It also would have eliminated a requirement that banks offer low-cost checking accounts and kill a plan to extend CRA to uninsured wholesale financial institutions, or "woofies."
Under a plan reportedly floated by the Federal Reserve Board and industry supporters, the provision letting regulators force divestiture would be removed, lobbyists and Capitol Hill sources said.
Two options on how to deal with woofies are under consideration. One would extend the CRA only to wholesale institutions affiliated with banks. Another would let a woofie linked with a bank escape the CRA, provided the parent company did not shift assets or deposits between the two units.
But the bill's chances of enactment this year took several blows this week. On Wednesday, Treasury Secretary Robert E. Rubin reasserted the Clinton administration's veto threat and acting Comptroller of the Currency Julie L. Williams blasted an industry compromise on bank insurance powers. Also, House Republican leaders refused to commit to banking industry demands that any pro-bank changes made by the Senate be preserved.
And in an interview Thursday, Sen. Gramm said he would only accept a broadening of the CRA if in return banks with "satisfactory" ratings or better could get merger or other regulatory approvals without interference from community groups. "Any expansion in CRA is going to require some reform in the program," the Texas Republican said.
He insisted he has significant Republican support and predicted the bill would fail on the Senate floor if a satisfactory compromise on CRA issues is not reached.
Provisions governing unitary thrift charters continued to change Thursday. Sen. Paul S. Sarbanes, the committee's ranking Democrat, still wants to limit the sale of grandfathered unitaries to commercial firms but has backed off efforts to bar grandfathered entities from entering new commercial ventures, sources said.