Reversing course, House Republican leaders announced Tuesday that they will continue to try to pass financial modernization legislation this year.

House Republican Conference Chairman John Boehner and heads of the House Banking and Commerce committees agreed to meet Oct. 9 to work out differences.

Tuesday's decision came 12 days after Rep. Boehner, along with House Majority Leader Richard Armey and senior Commerce Committee members announced that the legislation was too controversial to pass this year.

In an interview, Rep. Marge Roukema, R-N.J., said she is thrilled the bill still has a chance. "This is a clear message that we've made a commitment to do everything possible to get the bill through this Congress," she said. "We must put all industry groups on notice: This is not an insurmountable problem."

Most industry sources say a bill must pass the House this year if the Senate is to have time to tackle the legislation in 1998. Senate Banking Committee Chairman Alfonse M. D'Amato has refused to work on financial reform until a House bill passes.

Rep. Roukema said she and House Banking Committee Chairman Jim Leach were "enraged" by House leaders' decision to abandon the bill. The two pushed GOP leaders to reconsider, she said. "I think the leadership got the message that their reputation is on the line."

The recent spate of financial industry mergers demonstrates that Congress cannot wait to act, she said. "Nobody in the leadership could deny we would be handing over our responsibilities to regulators and causing a rash of court cases if we don't act."

Though industry opposition may continue to block the legislation, she said, lawmakers cannot give up. "We've got a lot of work to do," she added.

The Commerce Committee on Sept. 17 proposed major changes in a bill passed by the banking panel in June.

Rep. Leach has complained that the Commerce Committee plan, which would restrict bank operating subsidiaries to activities already permitted to banks, gave the banking industry little reason to support the bill.

The insurance industry has lobbied against the Commerce Committee plan because it does not define which products would fall under the jurisdiction of state insurance commissioners.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.