Claiming to have made major concessions, Republicans unveiled their latest financial reform offer Tuesday and challenged the White House to meet them halfway.

"I think I have been about as flexible as you can be," Senate Banking Committee Chairman Phil Gramm said at a news conference. "We have written a bill that merits the signature of the President."

Though the 322-page Republican bill compromises on the Community Reinvestment Act and consumer privacy protections, it sidesteps whether nonfinancial companies may buy existing unitary thrifts and whether national banks will be able to offer new products directly. The House-Senate conference committee will debate those issues starting Thursday.

But Treasury Secretary Lawrence H. Summers and Democratic lawmakers blasted the proposal.

"If the bill were presented to the President in its current form, the President would veto the bill," Mr. Summers said in a statement. "On each of the four key areas cited by the President -- business choice, the Community Reinvestment Act, consumer protections, and banking and commerce -- the recommendations are inadequate."

The Republican offer "falls far short of the core objections to this bill the Administration administration has clearly identified," Rep. John J. LaFalce of New York and Sen. Paul S. Sarbanes of Maryland said in a joint statement. "It is now time for the Republican Party to decide whether its own goal is a law or a veto."

Like the House bill, the Republican bill would require banks to have at least a "satisfactory" or better CRA rating to merge with an insurance or securities company. But it eliminated a House provision that would have required the merged entity to keep its rating from slipping below "satisfactory."

Sen. Gramm defended the decision Tuesday, saying he had made "a gesture to the White House" by agreeing to extend a community reinvestment requirement to banks applying to merge with nonbanks. Current law does not require merged banks to maintain a certain CRA rating, he argued, so to do so in bank-nonbank mergers would have been "a dramatic change" in policy.

Banks would also have to disclose payments that they make to community groups under the GOP plan. In return, Sen. Gramm agreed to withdraw demands that small, rural banks be exempted from the reinvestment law, or that banks with three consecutive years of "satisfactory" or better CRA ratings be shielded from protests unless new evidence emerges that their practices have deteriorated since the last exam.

However, the bill would lengthen the time between CRA exams to five years from 18 months for urban banks under $250 million of assets or rural banks, unless the bank files merger, branch, or certain other applications.

Consumer groups balked. "The five-year exam cycle is ludicrous," said John Taylor, president of the National Community Reinvestment Coalition. "A lot can happen in a year, much less five years."

The Republicans also jettisoned a House provision that would create uninsured, wholesale financial institutions, dodging a fight over whether they should be covered by CRA.

Republican lawmakers took a shot on settling Treasury's turf war with the Federal Reserve Board over direct bank powers. The bill would let a bank underwrite securities or conduct low-risk activities in a direct subsidiary provided the assets of all its subsidiaries do not exceed 5% of overall assets, or $20 billion. Insurance underwriting, merchant banking, or real estate development would have to be housed in holding company units.

Also, banks that exercise new powers in subsidiaries would have to be well managed, well capitalized, and would have to issue subordinated debt that is highly rated by independent agencies.

Acknowledging the proposal would not satisfy the Administrationadministration, House Banking Committee Chairman Jim Leach described the provision as a "placeholder" in the bill pending further negotiations.

On privacy, the bill would require financial institutions to have and annually disclose privacy policies and give customers the opportunity to block sharing of confidential data with third parties. Customers could not block data sharing among holding company affiliates. Broadening exceptions to help small banks, financial institutions that have joint marketing agreements with nonbanks would not have to give customers an opt-out option. And House provisions to protect privacy of medical records were excluded because of White House opposition.

The financial services industry generally reacted positively to the bill, which Sen. Gramm said could be approved late Thursday.

"It is a good bill," said Edward L. Yingling, chief lobbyist for the American Bankers Association. "We expect there to be some very tough fights, however. The important thing is the bill is moving toward the middle, and they have a timetable for getting it done fast."

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