The Republican leadership last week blew a chance for a much-needed image boost by canceling a vote on private mortgage insurance legislation.

Worried that the slow start of the 105th Congress was making them look disorganized, Republican leaders shortly before Easter prodded committee chairmen, including House Banking's Jim Leach, to quickly produce bills that Congress could approve with little debate.

A pro-consumer measure making it easier to cancel private mortgage insurance seemed like a perfect candidate.

But shortly before a scheduled April 8 House vote, Speaker Newt Gingrich and Majority Leader Richard Armey pulled the plug because of industry objections, even though the measure was expected to pass overwhelmingly. Neither lawmaker has commented on the decision, but sources said pressure came from the Mortgage Insurance Companies of America and the Consumer Mortgage Coalition.

Now the GOP leaders again find themselves fending off criticism from Democrats about kowtowing to industry over consumer interests.

"To say I'm outraged would be an understatement," complained Rep. Maxine Waters of California at a press conference by House Banking Committee Democrats Thursday.

Rep. Waters and other Democratic members demanded that Republicans bring the bill to a floor vote this week.

When Rep. Armey was first scouting for bills to pass quickly the measure seemed a sure bet-it was sponsored by a Republican and a similar plan was backed by Senate Banking Committee Chairman Alfonse M. D'Amato.

By getting tough on mortgage insurers, the Republican Congress could take on an issue that had gained significant media attention, including a spotlight on NBC News' "Fleecing of America" segment Feb. 24.

But Republican efforts to rush legislation doomed the public relations coup.

The original version, sponsored by Rep. James Hansen of Utah, would have required only that lenders disclose what it would take to terminate coverage. The industry had few complaints about that plan.

But to move the measure through the House without debate, Republican leaders needed support from Democrats, who wanted a tougher bill. Using their leverage, Banking Committee Democrats won a provision that would automatically cancel mortgage insurance when a borrower's equity in a home reaches 25%. They also stripped out a provision that would have preempted state mortgage insurance rules. The committee passed the bill 36-1.

Gleeful Democrats said last week that they would have tried to work out their differences with industry, if GOP leaders weren't so desperate to pass the bill quickly and without debate.

"We'd be delighted to have this come to the floor and make amendments," said Rep. Barney Frank, D- Mass.

Sen. D'Amato also bungled his bill by failing to gauge industry pressure. He was surprised when fellow Republicans refused to support automatic cancellation provisions in his bill and was forced to cancel his committee's March 18 vote.

Sen. D'Amato and other Republicans said the setbacks are temporary. "We're rather close to coming to an agreement," the New York Republican said Thursday.

But not without some self-inflicted bruises for the GOP and the mortgage insurance industry, critics pointed out.

"This indicates once again quite clearly who is running the Congress of the United States," said Banking Committee member Maurice Hinchey, D-N.Y. "It's the lobbyists."

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