WASHINGTON -- Senate passage of interstate branching legislation yesterday evening gives a boost to two other pending bills and may clear the way for consideration of broader financial services issues in the next Congress.
"Getting interstate done helps clear the decks lbr broader financial modernization," said Edward L. Yingling, chief lobbyist for the American Bankers Association.
"I think it makes it doable," added Sam Baptista, president of the Financial Services Council and a leading advocate for a broad overhaul of the financial services industry
Of immediate concern are two bills pending in this Congress: bankruptcy reform and a provision in the Superfund bill that limits lender liability for environmental cleanup.
"We're very,optimistic about the bankruptcy bill," Mr. Yingling said. "Superfund will be a little harder."
But Mr. Yingling said the major impact from the interstate bill's passage could cotne in later sessions of Congress.
"Had interstate not passed this year... we would have spent a good deal of the next Congress working on interstate -- the CRA provisions, insurance restrictions, ancl so forth."
Although the bill that passed contains a modest Community Reinvestment Act amendment, bankers had worried for much of this Congress that the final bill would include a more stringent measure.
There also was considerable concem that insurance agents could use it as a vehicle to win restrictions on bank insurance powers.
Not everyone agreed that the Senate action would open up the banking agenda for the next Congress.
"The president wrapped his arms around this bill," said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America.
Reckling that President Clinton had introduced NationsBank chairman Hugh McColl as a spokesman for the banking industry at a White House ceremony last sununer, Mr. Guenther said that event boosted the bill's prospects significantly. "It won't be quite so easy on the Glass-Steagall Act," he added.
And lawyer James Butera added that bankers may not be so anxious to go to the well on Capitol Hill again anytime soon.
"What do they need?" he asked. "I don't know of any bank that wants to be in insurance that can't find a way to get in. The same goes for securities."
The interstate bill cleared the Senate on a 94-4 vote after objections from two key senators were resolved. President Clinton is expected to sign the bill soon.
Although the measure has enjoyed broad support on Capitol Hill dnce it first came up for votes four years ago, its prospects were uncertain when Congress returned from its August break for the last few weeks of this session.
Sen. Howard M. Metzenbaum, D-Ohio, had threatened to hold up the bill because he believed it did not go far enough to extend state statutes of limitations for bringing suits against the officers and directors of failed financial institutions.
With the looming threat of a filibuster from Sen. Metzenbaum, which could have put the bill in an early grave, Majority Leader George Mitchell was prepared to file a motion to limit debate.
Senators voted overwhelmingly on Tuesday aftemoon to bring up the interstate bill, but it was still not clear whether Republicans were willing to allow a vote. However, chances brightened considerably when Sen. Metzenbaum said he had decided to support the legislation.
The Ohio Democrat had received a letter from Jonathan Fiechter, acting director of the Office of Thrift Supervision in which the thrift regulator said he was prepared to assume responsibility for bringing suits against officers and directors of failed institutions.
The OTS brings actions in administrative courts and is not bound by the state statutes of limitations that constrain the Resolution Trust Corp. and the Federal Deposit Insurance Corp.