Under pressure from Republican leaders, House Banking Committee Chairman Jim Leach will put his financial modernization bill to a vote before the panel Wednesday.
The vote, or "markup," will allow the committee to weigh in for the first time on new provisions Rep. Leach has drafted to gain the banking and insurance industries' support.
The vote was ordered by House Majority Leader Dick Armey during a meeting Thursday with banking panel Republicans.
Rep. Armey promised that the bill - which repeals the Glass-Steagall Act, grants banks regulatory relief, and allows banks and insurance companies to affiliate - would be brought to the House floor if it is approved by the committee.
A member of the House Banking Committee staff said the vote is expected to last one day and Rep. Leach anticipates strong Republican support for the bill.
"Most of these matters were voted on and passed by the committee last year. We've now worked out well-balanced legislation for industry groups and the public benefit," the aide said.
Pressure for the vote began building last week when House Banking Committee Democrats vowed to unanimously oppose Rep. Leach's bill because he has refused to hold hearings - even though the legislation has undergone numerous changes.
Still, the panel's ranking Democrat said Friday the vote should be delayed. "I see this proposed markup as a mockery," Rep. Henry Gonzalez, D- Tex., wrote in a letter to Rep. Leach. "If a draft took a year to perfect, how can it be fair for members to have only a few hours to review it?" asked Rep. Gonzalez, the panel's former chairman.
Since September, Rep. Leach's bill has been stalled because of industry disputes over insurance restrictions tacked on to the bill by House leaders. The most contentious provision was a moratorium on the Comptroller of the Currency's ability to grant new insurance powers to banks - a constraint the industry refused to accept.
Since then, Rep. Leach has tried to break the logjam by continually revising the legislation. The latest version:
*Allows common ownership of banks and insurance companies.
*Prohibits states from interfering with bank insurance sales.
*Allows banks and securities firms to own uninsured wholesale financial institutions.
In hopes of easing Democratic opposition to the bill, Rep. Leach also has agreed to drop provisions that would exempt small banks from Community Reinvestment Act reporting requirements.
But that offer may not be good enough to sway the Democrats. Frustrated by Rep. Leach's unwillingness to include them in negotiations over the bill, they said the legislation does not represent a bipartisan consensus.
"Our feeling is that the Democrats aren't on board with anything Leach is doing, nor have we been invited," said Rep. Bruce Vento, D-Minn.
Echoing the sentiments of his fellow Democrats, Rep. Vento derided Rep. Leach's repeated efforts to broker a truce between warring groups within the banking and insurance industries over the bill's insurance provisions. "Leach's deals are like 'Mission Impossible' - they self-destruct before they can be read by anyone," he complained in an interview last week.
Rep. Vento said Rep. Leach has allowed banking and insurance groups to write new insurance provisions into his bill, without any input from the rest of the banking committee. "It's a fig leaf. If Leach wore it in public, he'd be arrested for indecent exposure."
Rep. Leach said he will introduce a final version of the new bill today.
Friday's announcement of the pending vote surprised banking panel members, who expected Rep. Leach to take his legislation directly to the House floor.
But Rep. Armey gave him little choice. "We don't take legislation to the floor without letting members know what's in it," said an aide to majority leader.
Rep. Armey's decision was also a surprise to industry lobbyists, many of whom predicted that Republican leaders were unwilling to let the bill go before the House for a vote because of strong opposition within the banking and insurance industries.
Despite his desperate efforts to solicit broad support, Rep. Leach has garnered endorsements only from the Federal Reserve Board, the Independent Insurance Agents of America, and America's Community Bankers, the thrift trade group.
The bill is being opposed by the Treasury Department and the Comptroller's Office. Several interest groups - including the Bankers Roundtable, the American Council of Life Insurance, and the Securities Investors Association - demanded substantial changes as a condition of their support.
The Independent Bankers Association of America and 26 state banking associations are on record opposing the bill, while the American Bankers Association has not taken a position.