Lawmakers will pitch their proposed compromises in the financial services reform bill to the House Rules Committee at a hearing today.
House Republicans have postponed until next week a vote on the bill in order to solidify support. Before then, the rules panel must approve the version of the bill that will go to the floor and select which amendments lawmakers may consider.
The Clinton administration remains opposed. At a meeting this week with top executives from five financial services companies including Travelers Group and Banc One Corp., Treasury Secretary Robert E. Rubin threatened again to recommend a veto unless national bank powers under the bill are broadened, sources said.
"We think this legislation will erode the administration's role in banking policy," John D. Hawke Jr., Treasury under secretary for domestic finance, said Wednesday. "Unfortunately, the bill is an anathema to us in certain important respects."
Meanwhile, Federal Reserve Board Chairman Alan Greenspan met with House Speaker Newt Gingrich and other House Republicans Wednesday to reaffirm his support for the legislation.
Republicans and Demo-crats-who are grasping for compromises that will appease the administration and the banking industry-had until 5 p.m. Wednesday to propose amendments.
One change expected to be considered would let bank operating subsidiaries engage in securities underwriting and restore federal regulators' ability to override state insurance laws. From Reps. John LaFalce, D-N.Y. and Bruce Vento, D-Minn., the amendment might let merchant banking be done in an operating subsidiary as well.
Rep. John Dingell, D-Mich., urged lawmakers Wednesday to vote against the LaFalce-Vento amendment. Citing a Fed analysis, he said "greatly expanded activities" for operating subsidiaries would pose "dangers to the banking system" and consumers.