House Republican leaders got together last week to throw in the towel on financial reform.
In a statement issued late Thursday, four senior Republicans said the House Commerce Committee was granted more time to deal with the legislation. The panel's deadline was extended "to a date to be determined by the speaker," according to the statement.
"While we are encouraged by our progress on financial services modernization, more remains to be done," House Majority Leader Richard Armey said in the statement with House Republican Conference chairman John Boehner, Commerce Committee Chairman Thomas Bliley, and Rep. Michael Oxley, chairman of Commerce's finance and hazardous materials subcommittee.
The Republicans pledged to "redouble" their efforts to get the legislation through Congress next year.
Even before the leaders weighed in, prospects for action this year were slim. The Commerce Committee on Sept. 17 proposed major changes to House Banking's version of the bill. A committee vote on the bill is not scheduled.
Still, House Banking Committee Chairman Jim Leach urged GOP leaders Friday not to give up. In a letter to House Speaker Newt Gingrich, Rep. Leach predicted that the legislation would have broad support in Congress if it spells out which financial products would be regulated by state insurance regulators. (The Commerce Committee abandoned efforts to define which products would fall under the jurisdiction of insurance commissioners.)
He also complained that the Commerce Committee's plan to restrict bank operating subsidiaries to activities already permitted for banks gives the industry little reason to support the bill. Finally, he urged Republicans to restore consumer protection measures necessary for bipartisan support.
Edward L. Yingling, chief lobbyist for the American Bankers Association, blamed the lingering disputes on insurance groups, which mounted a vigorous lobbying effort against the Commerce Committee plan.
Gary Hughes, chief counsel for the American Council of Life Insurance, said his group is ready to resume negotiations. "We find it encouraging that the Commerce Committee wants to find common ground."