Key Vote Set for Today On Bank Reform Bill
WASHINGTON - House Republicans plan to make a last-ditch effort to block the banking reform bill as it moves toward a final vote today.
Fiercely resisting the bill because it contains a Democrat-engineered compromise on securities and insurance powers, GOP leaders failed Friday in an initial attempt to kill the legislation.
A Party-Line Vote
The vote was 243-158 and along party lines; only two Democrats joined Republicans on the losing side.
Rep. Robert Michel of Illinois, the House Republican leader, made the motion to kill the bill, warning that it would face a certain veto by President Bush if passed. Major banking trade groups and big-bank lobbyists also oppose the bill with the restrictions on securities and insurance, which were adopted Thursday.
By late today, after debate on several amendments not discussed Friday, the House is scheduled to vote on the entire package. Leaders from both parties were predicting a close vote.
Rep. Michel said that, if his motion had succeeded Friday, Democrats could have sent the bill back to the House Banking Committee with instructions to report out a new measure that would be acceptable to lawmakers and the White House.
But Rep. Richard Gephardt, D-Mo., the House majority leader, said the White House would have to compromise on the securities and insurance provisions if it wants to get a bill recapitalizing the Bank Insurance Fund.
"We simply have to pass a bank bill so that people know their savings are safe," he said in an interview. "We are facing a depression. If we didn't have the insurance fund and this bill to save it, the country would be in a depression right now."
Kennedy Amendment Rejected
In a surprisingly lopsided 241-to-152 vote Friday, the House rejected an amendment sponsored by Rep. Joseph P. Kennedy 2d, D-Mass., that bankers said would have proved a hugely expensive method of combating lending discrimination.
The Kennedy amendment would have required regulators to send "testers" - people posing as loan applicants - into banks to determine whether the institutions discriminate against members of minority groups.
An opponent of the measure, Rep. Toby Roth, R-Wis., said it could cost as much as $200,000 per institution. Rep. Jim Leach, R-Iowa, denounced the "tester" tactic as "un-American."
"When you test for these things, you have to create a character with a fictitious credit history on file with the reporting agencies," said Edward L. Yingling, chief lobbyist for the American Bankers Association. "You have to create a fake employment history that can be verified. And banks would have to pay for it."
Rep. Kennedy's amendment was among several that the House voted down once the reform bill came to the floor Friday. Rep. Barney Frank, D-Mass., loss his bid to remove the 7% annual asset-growth limitation on limited-service "nonbank banks," which he saw as a way to increase lending in economically pressed regions.
Leach Amendment Adopted
In a 272-137 vote late Thursday, an amendment by Rep. Matthew Rinaldo, R-N.J., to let nonfinancial companies buy failed or failing banks was defeated.
One that passed was introduced by Rep. Leach to toughen capital requirements for banks wishing to branch across state lines. Their Tier 1 capital level would have to be 6% of assets. It would have to be 5% for banks seeking to take advantage of new powers.
Meanwhile, uncertainty continued over the fate of the total package in light of the White House threat to veto any bill that included the restrictive compromise on securities and insurance powers.
Reason to Keep Debating
The compromise was crafted in private talks between House Banking Committee Chairman Henry B. Gonzalez, D-Tex., and Energy and Commerce Committee Chairman John D. Dingell, D-Mich.
Rep. Peter Hoagland, D-Neb., who had joined an earlier effort to stop debate on the measure that was sent to the floor, said he and others decided it was important to continue the floor debate to find out where members stood on other issues in the bill. That way, he said, if the bill is ultimately defeated, the House leadership will have some guidance for crafting a new bill.
The vote on Rep. Michel's motion to kill the bill, said Rep. Jim Slattery, D-Kan., "was a vote on who was going to control the debate," Republicans or Democrats. "But final passage will be close," he said.