Tipping his hand for the first time, Senate Banking Committee Chairman Alfonse M. D'Amato hinted Thursday that financial reform legislation should not grant broad new powers to banks.

The wily New York Republican never said outright at his committee's hearing on the bill that he would reject demands by the industry and Treasury Department that lawmakers let banks enter securities underwriting and other new businesses through operating subsidiaries.

But his sentiments came through during questioning of acting Comptroller of the Currency Julie A. Williams, whose testimony reiterated the Treasury's hard-line stance. For instance, he emphasized fears that bank operating subsidiaries would put the deposit insurance funds at risk in a way similar to the thrift crisis of the late 1980s.

"What reassurances can you give Congress that those of us who have a very real concern that this is what can and may take place again?" Sen. D'Amato asked.

He also noted that the House struck down by nearly 3-to-1 margins two amendments that would have expanded powers for bank operating units. Instead, the House bill passed May 13 would require financial holding companies to place new powers in holding company affiliates that would be regulated by the Federal Reserve Board.

"That question was decided overwhelmingly in the House of Representatives," Sen. D'Amato said. "Why take the risk?"

The opposition voiced yesterday by Ms. Williams and other federal regulators at the committee's fourth day of hearings on the financial reform bill compounded criticisms leveled by consumer advocates Wednesday.

But Sen. D'Amato insisted he would keep trying to advance the reform legislation. "Most of the differences and the concerns ... can be dealt with," he said.

Besides criticizing the restrictions on bank operating subsidiaries, Ms. Williams said the bill would unfairly limit bank insurance sales, allow banks to skirt community reinvestment requirements, and strip the comptroller of authority to override state insurance laws.

Ms. Williams presented a labyrinthine chart of the bill's provisions governing the insurance sales of national banks.

Its "standard of permissibility for banks to conduct insurance activities is so complex and so unclear that many banks will be unwilling or unable to figure out just what they are allowed to do," she said.

Lawmakers searched for compromises. Sen. D'Amato and Sen. Paul S. Sarbanes, the committee's ranking Democrat, asked Ms. Williams if she would support the bill if it broadened insurance powers for bank operating subsidiaries and dropped a requirement that banks start insurance sales in a state by buying an existing agency.

She held firm, saying those changes would not be sufficient.

Donna A. Tanoue, in her first public statements as the new Federal Deposit Insurance Corp. chairman, testified that bank operating subsidiaries would be safer for the insurance funds because they could generate earnings that strengthen the bank.

But Securities and Exchange Commission Chairman Arthur Levitt said he favored the bank holding company structure because his agency could more easily oversee securities activities. He also called for changes that would let the SEC continue to be the primary regulator of large broker-dealer firms that purchase smaller banks.

Ellen Seidman, director of the Office of Thrift Supervision, testified that the legislation's prohibition on the formation of new unitary thrift holding companies was "unnecessary" because of restrictions on the commercial lending of thrifts to between 10% and 20% of assets.

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