Efforts to enact regulatory relief legislation this year received a big boost Friday when Rep. Marge Roukema introduced a far- reaching bill.
The much-anticipated measure would let banks pay interest on corporate checking accounts, authorize the Federal Reserve Board to pay interest on reserves, ease capital requirements for purchased mortgage servicing rights, and allow insolvent banks to challenge their seizure in court.
"The prospects for passage look very positive right now," said Rep. Roukema, who is the chairwoman of House Banking's financial services subcommittee. "We have strong bipartisan support and we have issues that are not going to be very controversial."
A senior Democratic staff member said lawmakers in his party will support the bill. "We are being pragmatic," he said. "The provisions are relatively noncontroversial, and so far we are willing to recommend that this bill carry."
Rep. Roukema's subcommittee will vote Tuesday on the bill, and the full committee is expected to act in early September after lawmakers return from their summer recess.
The Senate Banking Committee approved a similar measure Thursday. The House and Senate are expected to vote on their respective bills in mid- September, making enactment possible by October.
Industry officials on Friday said they were disappointed Rep. Roukema's bill did not require the Federal Deposit Insurance Corp. to issue rebates, authorize the Federal Home Loan Bank System to finance business loans by banks, or eliminate a special reserve requirement for the thrift deposit insurance fund.
"What's in these bills is getting thinner and thinner in terms of real regulatory relief," said Edward L. Yingling, chief lobbyist at the American Bankers Association.
Still, industry officials said they supported the bill. "Anything that could give us regulatory relief is a blessing," said Anthony S. Abbate, president of Interchange Bank, Saddle Brook, N.J., and a director of the Independent Bankers Association of America.
"If there is anything positive, we would support it," Mr. Yingling said.
Brian P. Smith, director of policy and economic research at America's Community Bankers, said he expects Rep. Roukema to follow the Senate's lead and add the thrift deposit insurance fund fix to the bill during Tuesday's vote. "We would be very disappointed if it is not there one way or another," he said.
According to the bill, banks could offer interest-bearing corporate checking starting Oct. 1, 2001. In the interim, the bill would expand sweep accounts by letting corporate customers make up to 24 withdrawals per month from money market deposit accounts. The currently limit is six.
"This is something that helps small-business and us," Mr. Smith said. "It is a win-win situation."
Other provisions would:
Let the Fed pay interest on required and excess reserves. The rate could not exceed "the general level of short-term interest rates." The Fed is currently barred from paying interest on reserves.
Permit banks to count 100% of purchased mortgage servicing rights as capital. Currently banks only count 90% of these assets as capital.
Give officials at insolvent state and national banks 30 days to challenge in court the appointment of a receiver or conservator.
Order the FDIC and Fed to conduct a joint study of whether Congress should authorize refunds from the deposit insurance funds.
Bar third parties from subpoenaing examination reports.
Allow the Comptroller of the Currency to waive the requirement that all directors at a national bank be U.S. citizens.
Many of these provisions were debated at a House Banking subcommittee hearing last month. Officials from the Treasury Department, the Federal Reserve Board, and the Office of the Comptroller of the Currency spoke favorably of most of the key provisions, though Treasury opposes allowing the Fed to pay interest on reserves.