The House will not vote on financial reform legislation if widespread banking industry opposition persists, a key Republican leader pledged Friday.
"We understand the final bill has to be acceptable to a wide array of the banking industry if it is going to succeed," House Republican Conference Chairman John Boehner said in an interview.
Despite disagreements over rules for bank insurance sales and underwriting, securities activities, limits on bank operating subsidiaries, and regulation of financial holding companies, Rep. Boehner said a deal can be struck quickly.
"I can honestly say nobody in the leadership sees this as impossible," he said.
Rep. Boehner, who heads the GOP working group on financial reform, said Republican leaders will continue working with banking lobbyists to craft a bill the industry can support.
The Ohio Republican said it is "possible" a deal could be struck before Congress adjourns for the year. "We'd like to move as soon as possible; the only question is how long we're going to be here."
Congress is scheduled to adjourn Nov. 7, but lawmakers may be working as late as Nov. 21 to finish required legislation, including several spending bills.
Rep. Boehner's group, which includes senior members of the Banking, Commerce, and Rules committees, is trying to craft a bill that won't require members to choose sides among banks, securities firms, and insurance companies.
Earlier in the year, the securities and insurance industries opposed the reform bill, charging that it favored banks. But after the Commerce Committee revised the bill last week, it was the banking industry that objected.
Denying predictions, Rep. Boehner said the Senate will have time to pass a bill in 1998 even if the House does not act this year.
"We are committed to moving this legislation as soon as practical," he said. "That could be late this year or early next year. In either case, there will be ample time for Senate action."
Rep. Boehner said House leaders may not resolve all of the banking industry's concerns, but noted that the legislation will be changed as it moves through the Senate and on to the President's desk.
"Everybody wants every issue solved today," he said. "But no interest group will get precluded until a bill is at the White House. That's some time a way."
Rep. Boehner also said House leaders are trying to appease thrifts by examining provisions that would phase out the federal thrift charter. "Discussions are under way, but I can't say more," he said.
The American Bankers Association and America's Community Bankers are still negotiating with lawmakers, however they are taking different tacks.
The thrift lobby has repeatedly asked members to vote against the bill. ACB will oppose the legislation as long as it abolishes the thrift charter.
The ABA has four provisions that must be changed to win its support. Still, the trade group has never tried to stop the legislation from moving forward.
"We know a bill will never be perfect at this stage, but we are very serious about requiring the bill to address all our major concerns," ABA chief lobbyist Edward L. Yingling said in an interview Friday,
Rep. Rick Lazio, R-N.Y., agreed a deal must be worked out with the banking industry before bringing the bill to the floor. "It's more important to have a solid, supportable bill than it is to rush this thing to the floor," he said.
Despite the assurances, Republican leaders are keeping the pressure on so serious negotiations continue. While it may not happen, congressional sources said the Rules Committee may vote on the bill as early as Tuesday. The legislation could be brought to the floor one day after passing the Rules Committee.
The insurance and securities industries have mounted a furious lobbying effort because the legislation would let them counter regulatory and court decisions that have let banks enter their businesses.
To wit, three financial industry behemoths-Merrill Lynch & Co., Travelers Group Inc., and Morgan Stanley, Dean Witter, Discover & Co. - issued two joint statements last week urging lawmakers to pass the bill.
In addition, sources said House Speaker Newt Gingrich, Rep. Gerald Solomon, and other key leaders are determined to clamp down on the Office of the Comptroller of the Currency, which has aggressively expanded bank insurance powers and authorized banks to enter new businesses through operating subsidiaries.
Both pending bills would eliminate the comptroller's ability to authorize new insurance powers. The Commerce Committee bill also would limit operating subsidiaries to activities permitted for banks themselves.