Senate Banking Committee Chairman Phil Gramm unveiled his financial reform bill Tuesday, clearing the way for votes in both houses of Congress early next month.

"Better financial services at lower cost to every American should be delayed no longer," the Texas Republican said in a prepared statement.

Senate Banking will hold three consecutive days of hearings starting Feb. 23 with Federal Reserve Chairman Alan Greenspan. The committee is set to vote March 3.

In the House Banking Committee, Republican and Democratic leaders agreed Friday to vote on a compromise bill March 4.A House Banking spokesman said staffs for Iowa Republican Jim Leach, the panel's chairman, and New York Democrat John J. LaFalce, its ranking minority member, met Tuesday to iron out differences.

"We are very encouraged at where we are at this stage of the process," said Samuel Baptista, president of the Financial Services Council, which represents major banking, securities, and insurance organizations. "We have the chairmen of both banking committees committed to moving legislation forward. Everything seems right on track."

"Our preliminary view is that the parts that are in the Gramm bill generally look very good," said Edward Yingling, chief lobbyist for the American Bankers Association. "The problem is what is not in there."

Sen. Gramm's bill would not outlaw unitary thrift holding companies, which the ABA has insisted is a requirement for its support.

Dividing the bill in two, Sen. Gramm first listed issues that have garnered broad Republican support. These include provisions to break down the barriers between the banking, insurance, and securities industries.

National banks with less than $1 billion of assets could underwrite securities and insurance in direct operating subsidiaries. However, Sen. Gramm would force larger banks and state-chartered banks to conduct new activities through Fed-regulated holding companies.

Banking regulators would issue consumer protection rules for bank insurance sales, but states would have three years to enact legislation opting out of some federal oversight, according to Sen. Gramm's bill. Insurance disputes between federal and state regulators would be resolved in federal court, with neither side receiving deference from the judge.

Provisions listed in the second part of the proposal are described as "undecided."

Here, Sen. Gramm would gradually weaken the barriers between banking and commerce. At first, banks could earn up to 5% of consolidated net revenues from commercial endeavors. That amount would increase 5 percentage points every two years until it reached 25% of consolidated net revenues.

The bill would create a so-called "reverse basket," allowing a commercial firm to earn up to a quarter of its revenues from owning a bank.

Sen. Gramm also proposed extending for three years the requirement that thrifts pay a larger share of the interest due on Financing Corp. bonds, which were issued to help pay for the thrift industry's rescue.

On the controversial Community Reinvestment Act provisions, Sen. Gramm said merging banks with "satisfactory" or "outstanding" ratings would get safe harbor from community group protests.

Still undecided, he said, are "CRA anti-extortion, anti-bribery" provisions that would make it a crime punishable by up to a year in jail and $1 million in fines to pay or demand money from a bank for positive CRA testimony.

Karen Shaw Petrou, president of the consulting firm ISD-Shaw Inc., warned that President Clinton is likely to veto any negative amendments to CRA. She also noted that the administration wants new bank powers housed in direct subsidiaries.

Last week financial reform gained momentum in the House when Republicans and Democrats agreed to merge their competing bills.

As in Sen. Gramm's legislation, there are provisions that have gained wide agreement and other areas where the two sides remain apart. For example, Rep. Leach opposes any breach of the line between banking and commerce, while Rep. LaFalce would let financial firms earn up to 15% of annual revenues from commercial activities.

After three days of hearings last week, the two lawmakers agreed to get as close to consensus as possible and then bring the question to a committee vote.

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