WASHINGTON - The House Banking Committee on Thursday approved the Clinton administration's anti-money-laundering bill, but opposition in the Senate is likely to prevent it from becoming law this year.
Meanwhile, more details surfaced about the delay of legislation that would prohibit consumers from using credit cards to gamble online. House Banking was scheduled to vote on it Thursday but postponed action after complaints by the Treasury and Justice departments.
Speaking after the vote on the money-laundering bill, House Banking Committee Chairman Jim Leach, R-Iowa, said he is "reasonably optimistic" it will pass the House. "But as with all issues, it takes two bodies to act."
Indeed, Senate Banking Committee Chairman Phil Gramm has opposed the legislation. According to his spokeswoman, it would hand the administration too much power to demand information about individuals who are only suspected of a crime. She said the Texas Republican would "look closely" at the version approved by House Banking Thursday to see whether his objections had been met. Several observers, Rep. Leach among them, said that even if Senate Banking does not take up the measure, the Senate may combine a number of House-approved banking bills and act on them at the end of the session. The laundering bill, they said, could be one of them.
The bill, which the House committee approved 31-1, would give the Treasury secretary broad discretion to apply one of five "special measures" against foreign countries, financial institutions operating outside the United States, and international transactions if he determines they are of "primary money-laundering concern."
Banks dealing with those countries or institutions could be subject to increased reporting and record-keeping requirements. They could also be required to identify the owners of specific types of accounts frequently used in money-laundering activities and could be prohibited from opening correspondent and payable-through accounts for banks in targeted jurisdictions.
The bill voted on by the House committee was amended to ease some requirements, most significantly for identification of the beneficial owner of a foreign account, that had been criticized by industry representatives.
New language instructs Treasury to assure that any demand for the identification of beneficial owners be "reasonable and practicable" for the bank involved.
Another change instructs the Treasury to consider compliance costs and burdens that specific actions will impose on U.S. banks.
Edward Yingling, chief lobbyist for the American Bankers Association, said: "ABA appreciates some of the changes....However, we remain concerned about the ever-increasing regulatory burden on the banking industry, and we are not convinced that this legislation is really necessary at this point."
The Internet gambling bill, which was pulled from the committee's agenda on Thursday, is to be the subject of a June 20 hearing, a House Banking spokesman said. But when or whether the bill will come up for a vote is uncertain.
"We are working with both Justice and Treasury with their concerns," the spokesman said. "Some are things we think we can easily correct."
Sponsored by Rep. Leach and the committee's ranking Democrat, John J. LaFalce, the bill would ban the use of credit cards, checks, electronic funds transfers, or other "bank instruments" in making bets online.
Justice officials blasted "every section of the bill" and raised constitutional and state's rights issues, said a committee staff member.
And Treasury officials are worried that the bill would drive U.S. gamblers to establish accounts with banks overseas, which would make enforcement difficult.
The bill's authors tried to close that loophole by authorizing the Treasury and Federal Reserve Board to bar access to the payment system by foreign banks whose home countries promote Internet gambling involving U.S. citizens.
The bill would also authorize the secretary to instruct the U.S. representatives to the International Monetary Fund and World Bank to vote against nonhumanitarian aid for such countries. But these punishments could violate international accords, sources said.
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