Dingell and Gonzalez Win Key House Vote
WASHINGTON - In a dramatic rebuff to the Bush administration, the House of Representatives voted Thursday to retain an amendment that bankers say would restrict their ability to engage in securities and insurance activities.
The House voted 216 to 200 in favor of a compromise reached last week by the chairmen of the House Banking Committee and the Energy and Commerce Committee. Big-bank lobbyists had threatened to oppose the entire bill, and the White House threatened a veto, if the compromise were in it.
Rep. Doug Barnard, D-Ga., urged House members to reject the compromise. He warned that it would deprive banks of the opportunity to earn a profit.
But Rep. John Dingell, D-Mich., the Energy and Commerce Committee chairman and coauthor of the compromise, called the bill "pro-community, pro-depositor, pro-investor, and pro-taxpayer." He said a vote against him would amount to turning "everything over to the big banks.
"If you liked the Garn-St Germain Act, then by all means vote for the Barnard amendment" to remove the compromise, he said, referring to the 1982 savings and loan deregulation bill.
Earlier, the prospects for broad-based banking legislation had dimmed noticeably in a hotly contested procedural vote.
"The bill is clearly in trouble," said Rep. Thomas R. Carper, D-Del., after a resolution to permit floor debate passed by just two votes.
The surprisingly close result reflected widespread reluctance to deal with disparate proposals for sweeping changes in banking law.
"The vote showed the frustration with the issue," said Rep. Mary Rose Oakar, D-Ohio, a member of the House Banking Committee. "Most members just don't want to vote on banking legislation."
Ultimate Rejection Expected
Observers increasingly expect the House to reject the comprehensive measure on Monday, when it is scheduled to vote on it.
That would probably open the door for a so-called narrow bill that would do little more than recapitalize the fund insuring bank deposits.
Had the 210-208 procedural vote gone the other way, the measure would have effectively been killed.
Rep. Carper said the resolution was passed only because House Speaker Thomas S. Foley, D-Wash., personally pleaded with several Democrats who oppose the bill and will likely vote against final passage.
Rep. Foley acknowledged that he had lobbied members on the floor but warned against trying to read too much into the vote.
"Many members were not quite clear on what they were doing," said the Speaker, who has worked hard to pave the way for floor consideration of the complex legislation.
Foley Takes No Stand on Bill
But while Rep. Foley was determined to obtain a floor vote, he has avoided taking any position on the bill's merits.
Congressman lined up against the measure for a variety of reasons.
Many Republicans objected because the measure going to the floor included a compromise that swept aside a series of hard-fought votes in the banking panel.
The compromise struck by Rep. Dingell and Banking Committee Chairman Henry B. Gonzalez, D-Tex., would have the effect of limiting existing bank securities and insurance powers, rather than broadening them as President Bush has proposed.
Rep. Marcy Kaptur, D-Ohio, denounced the bill on the floor because, she said, it "gives the big banks of this country the right to put both hands in the pockets of the taxpayers of this country."
Farm Panel's Viewpoint
House Agriculture Committee Chairman E. "Kika" de la Garza, D-Tex., an opponent of the bill's interstate branching provisions, argued that the bill would have "ominous consequences for rural America."
And Rep. Pat Roberts, R-Kan., harshly criticized the House Rules Committee, which sets the terms for floor debate, because it permitted a vote on an amendment setting new Community Reinvestment Act reporting requirements for banks, while rejecting an initiative of his that would have exempted small institutions from that law.
The resolution governing floor debate, which was fashioned during several days this week and finally made public late Wednesday night, contained a number of surprises.
|Sense of Congress' Resolution
The panel agreed to permit a vote on an amendment sponsored by Rep. John J. LaFalce, D-N.Y., that gives regulators flexibility in deciding whether to enforce a provision in the bill that would otherwise require them to close any institution with a capital-to-assets ratio of less than 2%.
The panel also agreed to place before the House an amendment sponsored by Rep. Barney Frank, D-Mass., that would lift growth limits on limited-service, "nonbank banks." In 1987, Congress said nonbank banks - institutions that take deposits but do not make commercial loans - could not increase their assets by more than 7% a year.
In addition, the panel accepted a proposed "sense of Congress" resolution calling on Congress and the Bush administration to take immediately steps to end the credit crunch.
The resolution, sponsored by Rep. Jim Moran, D-Va., says the executive and legislative branches should look for new sources of credit and capital, seek "bank supervision and regulatory balance," and consider changes in real estate tax law.