The Senate Banking Committee is poised to add safety- and-soundness requirements and commercial lending restrictions to a bill expanding credit union membership eligibility.

The committee, however, is still expected to authorize credit unions to serve any company with fewer than 3,000 employees. Bankers will push to reduce that number to 500, but credit union lobbyists will seek to raise it as high as 7,500.

Lobbying will come to a head Thursday when the committee is expected to vote.

Officials at the three major banking trade groups are to present Senate Republican leader Trent Lott and Democratic leader Thomas A. Daschle with seven amendments today that would toughen the bill, which the House passed overwhelmingly April 1. The proposed changes include taxing large credit unions, barring almost all business lending, and limiting geographic expansion.

"I think there is going to be progress, but unless the dynamics change and Republican senators get behind key amendments, bankers are going to be disappointed," said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America.

Credit union leaders nevertheless are braced for a showdown.

"It is going to be a knock-down-drag-out, one-on-one brawl," said Daniel A. Mica, president of the Credit Union National Association.

Bankers are trying to schedule meetings with committee Chairman Alfonse M. D'Amato and the committee's ranking Democrat, Sen. Paul S. Sarbanes, by Tuesday.

Sources in the banking and credit union industries as well as on Capitol Hill expect the banking committee to approve a bill similar to the House version, which gutted a recent Supreme Court decision barring credit unions from serving multiple common bonds.

Besides expanding credit union membership eligibility, the House bill would impose community reinvestment requirements on the nonprofit institutions.

The safety-and-soundness provisions will be based on an 18-page proposal drafted by the Treasury Department, sources said.

It would require credit unions that drop below a 7% ratio of reserves to total assets to gradually replenish their reserves. Institutions that fall below 6% would be branded "undercapitalized," required to submit a reserve restoration plan to federal regulators, and forced to restrict asset growth.

Regulators would have to appoint a conservator or liquidate credit unions whose reserves fall below 2%.

The House version "falls far short of providing a real system of prompt corrective action," Richard S. Carnell, the Treasury's assistant secretary for financial institutions, wrote to Sen. D'Amato Wednesday. "It embodies a subtle but significant bias toward laxity."

Credit union leaders said they would grudgingly accept these safety-and- soundness changes because 93% of the nonprofit institutions had more than 7% capital reserves in 1996.

"It is no great pain," said Kenneth L. Robinson, president of the National Association of Federal Credit Unions. "The nature of the Congress is to compromise and not to get something for nothing."

Bankers also will find support for tightening existing limits on business lending by credit unions, bank lobbyists and Senate sources said. Under the House bill, the current regulatory limits would be frozen for a year while a study is done.

"A number of Republicans on the committee are looking at restrictions on commercial lending," a committee staff member said. "It ranges from an outright prohibition with minor exceptions to a cap on overall business lending that could be tied to the credit union's capital."

Some proposals would limit commercial lending to two to five times a credit union's reserves, Mr. Mica said.

"We just completed a scan of the senators on the committee and found they agree that credit unions as a general matter should not be making commercial loans," said Edward L. Yingling, chief lobbyist for the American Bankers Association.

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