WASHINGTON -- The Senate Banking Committee appears likely to postpone a vote on an interstate branching bill, a major victory for banks interested in keeping the issue separate from legislation dealing with bank insurance powers.
Committee Chairman Donald W. Riegle Jr., D-Mich., had planned to ask the panel to vote on interstate legislation Thursday and had pressed the Clinton administration to negotiate the details of a bill before then.
However, it appears now that Republicans will boycott the session en bloc. Sen. Richard Shelby, D-Ala., is expected to join the GOP lawmakers, and Democrat Sen. Patty Murray plans to be in her home state of Washington to accompany President Clinton at a meeting with Asian leaders.
If that happens, Sen. Riegle would be unable to muster the quorum needed to report out legislation. Although the situation could change quickly, Senate aides and industry lobbyists said Tuesday that it appeared markup of the legislation would have to be postponed until next year.
"The strategy is: If you can put off and delay legislation that rolls back bank insurance powers, time will take care of the issue for us." said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America.
"More and more banks are getting into insurance, and Congress is always reluctant to roll back activities banks are already in," he added.
Banks Dodge Insurers Parley
Robert Rusbuidt, a lobbyist for the Independent Insurance Agents of America, said the delay would ease pressure on banks. "We have been trying to sit down with the banks to negotiate." he said, "and they say they can't even talk about the issue."
But if the Senate report legislation addressing insurance powers, banks would have a strong incentive to begin talks, he said.
Joel Wood, vice president for legislative affairs at the Council of Insurance Agents and Brokers, said his group would be disappointed but would not object if the vote were postponed to "a date certain" next year.
"There's no reason to believe that Sen. Riegle has lost any of his enthusiasm for this bill," added Mr. Wood.
Although the bill before the panel would deal solely with the interstate issue, it was expected that Sen. Christopher Dodd, D-Conn., would offer an amendment to curb some bank insurance powers.
The Dodd amendment, according to sources familiar with it, would repeal the section of law that permits national banks to market insurance from towns of less than 5,000 population.
Instead, it would give national banks "parity": the same powers enjoyed by state-chartered institutions. It would offer a limited "grandfather" clause, or exemption, for national banks already selling insurance from small towns.
Sen. Dodd's amendment apparently would not address annuities specifically but would treat them as insurance, permissible if authorized by states.
It would not try to limit insurance sales from Delaware, where Citibank and Chase Manhattan Bank have offices engaged in nationwide insurance sales.
It was not entirely clear why the Republican banking committee members were considering skipping Thursday's session. The panel's ranking Republican, Sen. Alfonse M. D'Amato of New York, has been supportive of both interstate branching and of Sen. Dodd's proposed insurance restrictions.
But many committee members are reluctant to vote on a controversial bill that has no chance of going to the Senate floor before adjournment. Sen. D'Amato was also concerned that the panel might be asked to vote on a flood insurance bill that he opposes.