Trying to jump-start stalled negotiations on financial reform legislation, the House Commerce Committee on Wednesday offered to add several pro-bank provisions to its bill.
In a 30-page letter to the House Banking Committee, Commerce Committee officials proposed allowing banks to engage in additional securities activities, lift some restrictions on fee income, and restore the thrift charter.
For instance, Commerce would allow banks to underwrite municipal revenue bonds, an activity they now may conduct only in section 20 units or operating subsidiaries.
"That is a very big concession," a congressional source said.
Commerce also agreed to permit uninsured state-chartered trust companies to engage in securities activities provided they are fully regulated by state banking agencies.
The committee has agreed to clarify that banks may receive shareholder service fees and other fees that are not brokerage fees. The Commerce version would have prevented all these fees.
Regarding the proposed elimination of the thrift charter in both committee versions of financial reform legislation, Commerce has suggested that lawmakers keep the thrift charter or limit some of its powers.
Insurance issues still remain. Although congressional sources said the two sides could agree to the definition of insurance products in the Commerce version, no compromise has been reached on whether the Office of the Comptroller of the Currency would get deference in federal court in disputes with state insurance regulators.
Reaction was tempered. A Banking Committee spokesman said it does not appear to break much new ground, although "there appears to be movement in a couple of areas" such as allowing banks to underwrite municipal revenue bonds.
Nevertheless, "our staff will review it and is preparing to respond swiftly."
The letter does not contain legislative language and in some places it repeats questions Commerce posed last fall about the Banking Committee version.