Leach Foresees Single Senate Banking Bill
WASHINGTON - House Banking Committee Chairman Jim Leach predicted Tuesday that the House will pass several banking bills this year, but that the Senate will wrap them into a single bill that would not be voted on until late in the session.Although the Iowa Republican did not elaborate, sources said the reason is that Senate Republicans are worried that banking bills could become magnets for amendments to toughen consumer privacy protections in the Gramm-Leach-Bliley Act of 1999.
His remarks came during a hearing on three bills intended to reduce systemic risk in financial markets.
Rep. Leach urged adoption of legislation he introduced last week that would permit electronic trading of swaps and other over-the-counter derivatives and establish a U.S. clearing house for these products. The bill makes clear, however, that these activities would not be subject to oversight by the Commodities Future Trading Commission.
But he said that the bill does not include all recommendations made by the President's Working Group on Financial Markets last year, and that lawmakers need to collaborate on broader legislation that would exclude swaps and other over-the-counter derivatives from federal regulation.
Rep. Richard H. Baker, chairman of House Banking's capital markets subcommittee, stumped for his bill that would increase public disclosure requirements on unregulated hedge funds.
Industry reaction was generally positive. Michael A. Watkins, deputy general counsel of First Union Corp., testified for the ABA Securities Association in support of the Leach and Baker bills and a third bill that would update bankruptcy laws to prevent the failure of a financial institution involved in various derivatives contracts from harming other institutions.
House Passes Business Checking Bill
WASHINGTON - As if on cue, the House approved legislation on Tuesday that would let banks pay interest on business checking accounts three years after enactment.The bill, which was introduced last month by House Banking Committee Jim Leach and Rep. Jack Metcalf, R-Wash., would in the interim expand so-called sweep-account powers by increasing from six to 24 the number of transfers that corporate customers may make each month between their checking accounts and sweep, or money market deposit, accounts.
A similar measure was adopted last year by the Senate Banking Committee but belongs to a larger bill that has stalled.
Separately on Tuesday, the House unanimously approved a broad tax reform measure that would toughen restrictions on how banks use tax return information about loan applicants. It would require lenders to get applicants to sign and date a detailed consent form before reviewing their tax records. The form would specify who is to receive the information and for what purpose. Any third party receiving tax data would be required to keep the information secret.
- Dean Anason
