Rep. Charles E. Schumer has asked the Federal Reserve to refrain from increasing securities underwriting limits for banks' section 20 affiliates until after Congress acts on financial modernization.

Regulators should wait even though lawmakers are unlikely to act on financial modernization this year, the New York Democrat wrote Fed Chairman Alan Greenspan. "Congressional inaction does not justify extra-legislative action that, while perhaps technically legal, falls far short of the kind of reasoned consensus that such far-reaching measures should require," Rep. Schumer wrote Monday.

Rep. Schumer said he hoped to counter House Banking Committee Chairman Jim Leach's June 11 request that the Fed increase the limits on section 20 underwriting.

Fed rules currently let such affiliates obtain up to 10% of their revenues from underwriting corporate securities.

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