House Undecided on Bank Reform
WASHINGTON - With a floor vote scheduled today on banking reform legislation, law-makers remained undecided on whether to give banks more or fewer insurance and securities powers.
As a result, some bankers thought the insurance and securities section would be removed and, with it, a compromise reached last week by two key Democrats that was designed to win widespread support in the House.
"It's a very volatile situation," said Edward L. Yingling, chief lobbyist for the American Bankers Association. "Almost everyone we talk to wants to narrow the scope" of the legislation.
"Ultimately, there is a question of whether the bill will even be passed," Mr. Yingling said.
Brady Ready to Fight
Treasury Secretary Nicholas Brady struck a combative partisan tone after a meeting with House Republicans Wednesday morning. "I'm sure if the matter of repealing [Title IV, the restrictive insurance and securities section] comes before the House, it will be repealed," he said.
Mr. Brady may have trouble rallying the Republicans against the Democratic compromise, which many representatives of large banks also oppose. In the meeting, Mr. Brady focused on the banking bill but found law-makers more interested in tax proposals.
Rep. Jim Leach, R-Iowa, said he believes the administration still has a good chance to prevail in its effort to strike out of the bill the restrictive powers and services section. With "everyone outside the banking committee undecided," he said, the House may "come to a decision that they would rather do nothing."
On the Democratic side, support was growing for the compromise reached by House Banking Committee Chairman Henry B. Gonzalez, D-Tex., and Energy and Commerce Committee Chairman John D. Dingell, D-Mich.
Rep. Mary Rose Oakar, D-Ohio, a banking panel member, said she would prefer to stick with the panel's original product, which closely resembled the Treasury Department bill. "But I might just vote for the compromise because of the good will" between committees, she said.
Republicans were likely to break with the administration on a number of other key issues. Rep. Henry J. Hyde, R-Ill., said many GOP members will oppose an administration attempt to limit deposit insurance coverage for multiple accounts. "Small banks have expressed great concern that limits would drive deposits to the too-big-to-fail banks," he said. "And I am inclined to agree."
The Independent Bankers Association of America and its lobbying ally, the American Association of Retire Persons, have bombarded Congress with materials urging preservation of deposit insurance coverage.
The House Rules Committee, which sets the terms of House floor debate, postponed until Wednesday night a decision on the amendments that would be put up for votes. But Chairman Joe Moakley, D-Mass., said his committee had decided to reject the insurance and securities section of the bill approved by the House Banking Committee and substitute the Dingell-Gonzalez compromise.