The House Banking Committee approved an amendment to financial reform legislation Wednesday that would require operators of automated teller machines to disclose surcharge fees.

The provision, adopted on a 48-to-1 vote, was offered by House Banking Chairman Jim Leach and ranking Democrat John J. LaFalce as an alternative to Rep. Bernard Sanders' proposed ban of surcharges.

In its second day of deliberations on the bill, the committee also approved amendments that would create new capital requirements for the Federal Home Loan Bank System and clarify that borrowers would not have to buy insurance or investment products as a condition for a bank loan.

The committee rejected a second attempt by Democrats to force banks to provide services to low- and moderate-income people. The measure would have required banks to offer affordable accounts and would have prevented them from closing branches or other services in poor or minority neighborhoods.

House Banking continued debate late into the afternoon and was expected to finish voting on the bill today.

Under the fee disclosure provision, a bank would be prohibited from charging an ATM user who holds an account at another institution unless it posted notices on the ATM and on the screen. Banks would be protected from liability if an outsider damages or removes any signs.

"This is the most progressive thing that I think Congress is capable of passing at this time," said Rep. Leach, who predicted that an outright ban had no chance of passing. "Given the nature of our market system, this is a better way to go at this time."

Rep. Sanders and some Democrats were unsatisfied. "Maybe it's time we stood up for consumers rather than large banks," the Vermont Independent said. "The public agrees with a ban on surcharges."

But some Republicans complained that even a disclosure requirement would be too intrusive and that banks have to levy fees to cover payments to retailers for locating the machine as well as for installation and other costs.

No bank has "a gun held to someone's head that says you must use my ATM machine," Rep. Richard H. Baker, R-La., said. "If these things are so evil, we all ought to go back to the five o'clock teller lines, breathing carbon monoxide, waiting an hour to get our checks cashed. That is not progress."

Rep. Judy Biggert, R-Ill., said the proposal would only add reporting and examination costs without providing any benefits to consumers.

Industry lobbyists agreed, arguing that ATM networks already require these disclosures. Limits might stifle smart cards and home banking, they added.

"It could require that you have signage on your PC at home," said William P. Binzell, vice president of government relations for MasterCard International.

On Home Loan banks, the committee on Friday approved a proposal Reps. Baker and Paul E. Kanjorski that would create three new classes of stock for the system. One class of stock would be redeemable in six months, a preferred class would be redeemable in five years, and a third would be nonredeemable unless sold to another system member.

Rep. Leach opposed the proposal's minimum 2.5% capital ratio for Home Loan banks and succeeded in getting the committee to raise it to 5%

However, Reps. Baker and Kanjorski returned with an alternative Wednesday that would weight more heavily the value of preferred and nonredeemable stock toward meeting capital requirements.

Rep. Leach still objected, arguing that members would flock to the class of stock with the lowest capital requirement.

But Rep. Baker successfully defended the plan as a way to promote stability by using lower minimum capital requirements to encourage banks to buy the nonredeemable, or permanent, form of stock.

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