Financial reform legislation has advanced at lightning speed so far this year, but its pace is expected to slow considerably in coming weeks.

The House Banking Committee scored a coup by approving the bill on a 51- to-8 vote late Thursday. But the House Commerce Committee is threatening changes and Senate Banking Committee leaders are groping for compromise on their reform bill, which was adopted March 4 on a party-line vote.

What's more, banking industry support has waned because of an amendment that would let commercial companies purchase existing unitary thrifts.

Industry lobbyists are also concerned about the bill's increased privacy protections, public meeting requirements for megamerger applications, and mandated disclosures of automated teller machine surcharges.

"We would still like to be supporting financial modernization, but the House bill took on some water," said Edward L. Yingling, chief lobbyist for the American Bankers Association.

Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America, said that letting nonfinancial firms buy thrifts "destroys the delicate balance" of earlier legislation.

More changes may be in the offing.

In an interview Friday, Rep. Michael G. Oxley, R-Ohio, said the Commerce Committee wants to toughen the restrictions on bank operating subsidiaries by barring them from merchant banking and any underwriting activities. He also predicted the committee would tinker with the thrift and privacy provisions as well as impose tighter securities regulation on banks.

Rep. Oxley, who chairs Commerce's finance subcommittee, plans to hold financial reform hearings in April. But he said Commerce members would prefer not to vote on the bill until the full Senate votes.

He acknowledged the pressure to speed the process along.

The House Banking bill "has broad bipartisan support," he said. "Our leadership would like to get that on the floor and get it passed."

Approved by committee late Thursday, the House Banking bill would remove the restrictions between investment and commercial banking and permit affiliations between banks and insurance companies. It would ban cross- ownership of banks and nonfinancial firms, but give holding companies merchant banking powers and let them engage in "complementary" activities such as magazine publishing or Internet services provided these side activities remain "small."

The House Banking bill moved closer to the Senate version. The two measures are nearly identical in terms of unitary thrift powers and limits on bank sales of insurance.

Yet Senate Banking's bill would place stricter curbs on bank operating subsidiaries, while House Banking would impose stricter community reinvestment requirements on banks seeking to merge with insurance or securities firms.

Committee Chairman Jim Leach and ranking Democrat John J. LaFalce said that the wide margin of approval gives the House bill more momentum than the legislation the committee approved 28-26 in 1997. Rep. LaFalce predicted Senate Democrats would support the House Banking version.

Rep. Ken Bentsen, D-Tex., successfully pushed through the amendment that would let commercial firms purchase unitary thrift holding companies. The committee adopted the Texas Democrat's proposal on a 29-to-26 vote over the objections of Rep. Leach.

"Based on the closeness of the vote in committee, we would think we'd have an excellent opportunity to overturn that on the floor," Mr. Yingling said.

The committee adopted on a 52-to-6 vote a measure that would require banks to disclose their privacy policies to customers and keep medical information confidential. It would also make it a federal crime for someone to trick a bank into divulging private data on customers. Reps. Leach and Bruce F. Vento, D-Minn., offered the bipartisan compromise as an alternative to a stricter privacy protection proposal.

Although some lobbyists worried this would increase costs, Marcia Z. Sullivan, director of government relations for the Consumer Bankers Association, said banks must respond to customer privacy concerns anyway or face heavier mandates.

Resolving another sticking point, the committee accepted a bipartisan compromise on public hearing requirements for megamergers. The Federal Reserve Board would have to hold public meetings on mergers involving banks with assets of $1 billion or more in any markets where the agency believes there will be "a substantial public impact."

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