The House Commerce Committee is expected to drop from its financial modernization bill a controversial plan to boost the power of states over bank insurance sales.

Despite lawmakers' change of heart, however, banking lobbyists said it is still too early to say whether the industry will support the broad legislative package, which allows banks to merge with insurance, securities, and nonfinancial firms. The industry has lobbied intensely during the past two weeks to fight off any new insurance restrictions.

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