community reinvestment provisions Wednesday as Sen. Phil Gramm and Treasury Secretary Lawrence Summers spent the day holed up in the Texas Republican's office.

Emerging just before 5 p.m., Sen. Gramm said: "We have a proposal on the table. A proposal is not an agreement. I can live with it. ... The secretary is going to have to ... decide whether the answer is yes or no."

Mr. Summers, according to Sen. Gramm, planned to discuss the proposal with other Clinton administration officials and get back to the senator with an answer by 7 p.m., when the House-Senate conference committee crafting the bill's final form planned to reconvene.

"The bottom line is it's time now for us to write a bill," Sen. Gramm said, adding he hoped "we can move ahead tonight and pass a bill."

Sen. Gramm would not detail the proposal, but said the two sides were furthest apart on provisions that would require community groups to annually disclose payments received from financial institutions and what they did with the funds. Free updates of this story are available at www.americanbanker.com.

While the key negotiators were focused on changes to the bill's Community Reinvestment Act provisions, other lawmakers reopened debate on the bill's privacy section.

At an afternoon press conference Wednesday, three Democratic members of the House and one Republican senator urged President Clinton to veto the bill if the privacy language adopted by the House-Senate conference committee Monday is not toughened.

"The current financial modernization bill allows financial institutions to treat their consumers like currency ... to be bought and sold," said Sen. Richard C. Shelby. The Alabama Republican and other lawmakers argued that customers should be able to block information-sharing among banks and their holding company affiliates.

The White House had threatened to veto the bill over both CRA and privacy, but on Tuesday President Clinton's press secretary said the administration was satisfied with the privacy provisions.

Wednesday was the second consecutive day of intensive negotiations on the CRA provisions, which began Monday night when Mr. Summers interrupted the conference committee's work to meet with senior committee lawmakers.

Those discussions continued all day Tuesday. When they reconvened Wednesday, other lawmakers were not included as Sen. Gramm conducted the talks solo.

Sen. Gramm, an economist and former Democrat now in his third Senate term, appeared to hold the upper hand. Early in the day he produced a letter of support signed by nine of the Senate's 10 other Republican delegates to the conference committee -- enough votes to block any broadening of CRA.

"Any additional expansion of the CRA provisions in this bill could cause us to reconsider our support for the entire package and withhold our signatures from the conference report," the letter said.

Mr. Summers and a handful of other Clinton administration officials retreated at least a half dozen times during the day to an office around the corner to consider their options. Then they would reemerge and march back into Sen. Gramm's office. Around 4 p.m., National Economic Council Director Gene Sperling and Treasury Under Secretary Gary Gensler left the negotiations to brief key Democrats Sen. Paul Sarbanes of Maryland and Rep. John J. LaFalce of New York.

"We're still talking, but nothing has been agreed to yet," Mr. Gensler said.

Many observers took Wednesday's tete-a-tete as a positive sign.

"I think we know enough to know that progress is being made and that the issues have narrowed," said Edward L. Yingling, the American Bankers Association's top lobbyist. "If this deal is cut, for all practical purposes it's a done deal."

In an interview Wednesday morning, Rep. Jim Leach, who chairs the conference committee formed to blend the House and Senate versions of financial reform, said a consensus between the White House and Sen. Gramm appeared reachable. "Both sides have shown some flexibility," said the Iowa Republican, who did not participate in the Gramm-Summers meeting. Rep. Leach predicted the conference committee would finish its business Wednesday.

Wednesday was the fifth day of negotiations on a compromise bill offered Oct. 12 by Sen. Gramm, Rep. Leach, and Rep. Thomas J. Bliley Jr. Initially, the three party leaders said they would allow only two days of negotiations on their bill.

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