House Banking Committee Chairman Jim Leach on Thursday gave financial reform a less-than-even chance of being approved by the House this year.
"Although I had hoped that a bill would pass the House this fall, I recognize that the chances are now less than fifty-fifty," he told reporters after a speech.
Still, the Iowa Republican said he is negotiating with Commerce Committee Chairman Thomas Bliley in hopes of reaching a compromise package before Congress adjourns.
"Before we go home I want to have a new product on the table, preferably one that has Commerce Committee support," he said.
Banking and Commerce committee aides have been meeting daily to try to settle differences between the two bills. Little progress has been made on major issues such as powers of bank operating subsidiaries, rules for bank securities and insurance operations, and holding company supervision.
However, the two committees have agreed to restructure the finances of the Federal Home Loan banks and allow system members to use advances for small-business, economic development, and agricultural loans. Those provisions were approved by the Banking Committee in June, but stripped out by the Commerce Committee two weeks ago.
Also, on Wednesday senior Democrats from the Banking and Commerce committees joined the GOP working group on financial reform. Recognizing that bipartisan support is necessary to pass the bill, GOP leaders asked Reps. John Lafalce, Bruce Vento, John Dingell, and Tom Manton to enter the talks.
The Democrats are insisting that the reform package include several consumer protection measures. For instance, they want to require banks to offer low-cost checking accounts before becoming eligible for mergers with securities and insurance firms. They also want to forbid insurance companies to deny coverage to victims of spousal abuse.
If a deal is struck and the bill comes to a vote, opponents may have little chance to fight for changes. That's because on Thursday, House Speaker Newt Gingrich won the right to forbid amendments to any bill brought to floor for the rest of the year.
That's bad news for the banking industry, said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America.
"If a deal is reached, no one outside the small group involved in the negotiations would know what was in the bill and no one could make any changes," he warned.
Still, the Securities Industry Association, the American Council of Life Insurance, the American Insurance Association, the Investment Company Institute, and the National Association of Mutual Insurance Companies sent a joint letter to Speaker Gingrich on Thursday, urging the House to approve the bill before leaving town.
While scheduled to adjourn today, Congress is expected to wrap up its work over the weekend.