Under heavy opposition from credit unions, the House Banking Committee backpedaled Thursday on draft legislation that would impose new regulations and membership restrictions on the nonprofit financial institutions.
Separately, Republican leaders said the financial services reform bill will come to a vote in the House the week of March 30. The House Rules Committee likely will set the terms of debate on the bill at a hearing March 30 or March 31, a committee spokesman said.
House leaders still have not decided whether to link the financial reform and the credit union bills.
House Banking Committee members did not reach a consensus on many details of the credit union legislation during a nearly two-hour, closed- door session Thursday.
Committee Chairman Jim Leach, R-Iowa, and Rep. John J. LaFalce, D-N.Y., were expected to unveil a bipartisan bill Thursday that would let credit unions keep their current members and continue adding members from employee groups already being served. But it would have barred them from adding groups above a set size.
The bill also was supposed to have imposed community reinvestment and supervisory rules similar to those of banks.
But after credit union leaders balked, Reps. Leach and LaFalce agreed to go back to the drawing board. "We are trying to refine it so no one will oppose it-if possible," Rep. LaFalce said.
Lawmakers agreed that credit unions should keep members and groups and not have to pay taxes, a committee spokesman said. But they disagreed on what the size limits should be for adding new employee groups and whether state-chartered credit unions should have to comply with these limits.
They also could not agree whether to adopt supervisory regulations submitted by the Treasury Department or require community reinvestment rules for credit unions.
Rep. Leach wants the committee to vote on the bill next week, but it is unclear how soon a revised draft will be ready.