WASHINGTON - A key member of the House Republican leadership is fighting a plan that could wind up killing a proposed ban on new insurance powers for national banks.
Rep. Gerald Solomon, chairman of the House Rules Committee, said in a memorandum to Majority Leader Richard Armey that a proposed moratorium on expansion of insurance powers by the Comptroller of the Currency is not open to debate.
"It is imperative that any bill contain OCC moratorium language," the New York Republican said, because the agency's officials "have abused their power and must be stopped."
Rep. Solomon's warning came in response to a proposal from Rep. David Dreier, R-Calif., a senior member of the Rules Committee.
Rep. Dreier had proposed that the House this week consider a Glass- Steagall repeal bill under a procedure limiting debate to 40 minutes.
He further recommended that the bill include two insurance amendments approved by the House Banking Committee in the context of regulatory relief legislation - the OCC moratorium and a measure permitting banks to affiliate with insurance companies - and that those two amendments be voted upon as one.
In unusually harsh language, Rep. Solomon warned in a memo to Rep. Armey that opponents of bank insurance powers would "bring this bill down" if the two amendments were linked that way. "Dick," he wrote, "you can count on it."
Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America, said the Solomon memo sets the Rules chairman at odds with House Banking Committee Chairman Jim Leach, who first proposed the idea of an "all-or-nothing" vote on the two insurance amendments.
"He (Solomon) summarily and rather brusquely rejects the Dreier proposal, but he also totally rejects the number-one Leach proposal," Mr. Guenther said.
The Solomon memo also raises the stakes for the banking industry by tying the insurance issue squarely to the Glass-Steagall bill - a top priority for Rep. Leach.
The Banking Ccommittee considered it in the context of regulatory relief - a high priority for the banking industry - leaving open the possibility that Glass-Steagall could pass without amendments that would be broadly opposed by banks.
Rep. Solomon's memo suggests that neither bill will pass this year unless the insurance issue is dealt with.
Robert A. Rusbuldt, lobbyist for the Independent Insurance Agents of America, said the Dreier approach was a big risk for advocates of either Glass-Steagall repeal or of regulatory relief.
"You have to have two-thirds of the votes to pass a bill under suspension of the rules," Mr. Rusbuldt said. "To say that Glass-Steagall or reg(ulatory) relief can garner two-thirds of the House at this point in time is naive."
A number of legislative and industry sources said it was unlikely that regulatory relief or Glass-Steagall legislation would reach the House floor before Congress leaves for August recess.
