Sweeping financial reform is finally on the verge of enactment, but several stubborn issues remain to be resolved by House and Senate negotiators.

"Momentum is much too great for this legislation to stop now, but I expect it to be a very difficult conference," said Steve Blumenthal, a House aide turned Schwab Washington Research Group analyst.

The conference committee-the lawmakers who are to reconcile the differences between the House and Senate bills-is expected to be named next week. It must come to agreement on two issues that have dogged the legislation from the beginning.

"The principal areas of contention remain where they have always been: community reinvestment and operating subsidiaries," Mr. Blumenthal said.

The House bill, adopted 343 to 86 late on July 1, would make no changes to the Community Reinvestment Act and would split supervision of new financial conglomerates between the Federal Reserve and the Treasury Department. However, the bill approved May 6 by the Senate would lighten community reinvestment demands on banks and would hand regulatory oversight to the central bank.

The extensive consumer privacy protections included in the House bill present a third hurdle.

Privacy recently erupted as the dominant issue in the bill. The House bill garnered so much support mainly because it gives customers a chance to block their banks from sharing personal information with third-party marketing companies.

Many Democrats wanted to go further and let customers prevent banks from sharing data with affiliated companies. But Republicans argued that the impact of additional restrictions on bank operations must be studied.

"The bill before us represents the greatest expansion of privacy rights in modern finance," House Banking Committee Chairman Jim Leach said.

The Senate bill has no limits on information sharing, and Senate Banking Committee Chairman Phil Gramm has said he would like to tackle the privacy issue in separate legislation.

But most sources expect the conference committee to accept the House language.

"There is no question that privacy has a big head of steam," said America's Community Bankers president Paul A. Schosberg. "I don't think Phil Gramm is going to throw himself in front of that steamroller. He is going to find a way to accommodate it."

Most sources said they expect the overall bill to take more from the House version than the Senate's, which passed by only 10 votes.

"The House bill is where the industry is, it's where the administration is, and it's where the public is," said a congressional source who requested anonymity.

The White House had threatened to veto the Senate bill, arguing it weakens CRA and the administration's role in bank regulation.

Though pleased with his landslide victory, Rep. Leach was still cautious.

"Margins (of victory) aren't the be-all and end-all of lawmaking, but they are helpful," he said. "This is very difficult legislation. There are always pitfalls. I'm hopeful that this will produce a product that will become law, but I will not make any ironclad assurances."

"We face some very high hurdles, and negotiations will require a tremendous effort," Sen. Gramm said in a statement, "but I am ready to take the time and do the hard work."

Edward L. Yingling, chief lobbyist for the American Bankers Association, said he expects Sen. Gramm to give some ground on community reinvestment.

"The veto threat is not idle," Mr. Yingling said. "Everybody expects the CRA provisions to move more toward neutrality."

The Senate bill would exempt banks with less than $100 million of assets and would require banks to disclose payments made in connection with CRA pledges. Banks earning three consecutive satisfactory CRA ratings would be protected from most protests.

The consensus among industry lobbyists is that a financial reform bill will be on President Clinton's desk before Congress goes on summer vacation.

"There is going to be a law before the recess kicks in Aug. 6," Mr. Schosberg predicted.

"They will make a real effort to finish it up by the August recess," Mr. Yingling said.

With the House vote Thursday, both chambers approved financial reform in the same year for the first time. Both bills would repeal the laws separating banking, securities, and insurance.

Most sources expect that the Treasury Department and the Fed will agree that both should play a role in regulating the companies that emerge from this legislation.

"There are some very tough negotiations ahead, but there is a middle ground," Mr. Yingling said.

Though the conference committee has some tough calls to make, Consumer Bankers Association president Joe Belew ticked off many issues that have already been settled.

"Look at all the issues that are, if not completed, then mostly completed," he said. "I think you have to recognize just how far along this is on multiple fronts."

He added that the legislation validates what has already been done by the courts, the regulators, and individual institutions.

"Congress is trying to rationalize what is already going on," he said. "I think that's what's driving this bill."

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