The House has scheduled a second showdown on financial reform legislation for May 13.
At a Rules Committee meeting on the bill Thursday, Chairman Gerald Solomon beseeched lawmakers to compromise and urged the Clinton administration to tone down its opposition. He even suggested that opponents were likely to win changes to the bill when it reaches the Senate.
"We ought to move this legislation, let the House work its will, get it over to the Senate," the New York Republican said.
To entice more support from the banking industry, a host of pro-bank amendments are being considered, including plans to broaden bank operating subsidiary powers, relax strictures on bank sales of insurance, rebate deposit insurance premiums, and relax community reinvestment requirements on small banks.
"It is in no way enough," said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America. "We will continue to lobby aggressively against final passage."
Chief lobbyist Edward L. Yingling said the American Bankers Association still opposes the bill, too.
The House first tried to approve a financial reform bill on March 31. But when Republican leaders discovered they did not have the votes for passage, the bill was pulled from the floor. A second vote was originally scheduled for May 7, but was scrubbed early this week because a key Democratic supporter, Rep. John D. Dingell of Michigan, had to leave town.
Before House Republican leaders can try again Wednesday, the Rules Committee must select which amendments lawmakers may consider. That vote is set for Tuesday.
Treasury Secretary Robert E. Rubin, in a letter Thursday to Speaker Newt Gingrich, vowed to recommend a presidential veto if Congress approves the legislation in its current form.
The administration strongly objects to proposed curbs on operating subsidiaries and other limits on national bank powers as a threat to its influence on the banking system.
Rep. John J. LaFalce, D-N.Y., sided with the administration during the Rules Committee meeting Thursday. "We would be undermining the national bank charter on our watch," he testified. "I don't think we want to do that."
Rep. LaFalce threatened to offer a motion on the House floor that would gut the reform bill if his amendment to broaden national bank powers is rejected.
Reps. LaFalce and Bruce F. Vento-the top Democrats on the House Banking Committee-have proposed allowing operating subsidiaries to conduct merchant banking and securities business, but barring them from insurance underwriting and real estate development. Their plan also would restore the comptroller of the currency's legal advantage when sued.
Rep. LaFalce said he would seek a bare-bones bill that would eliminate Glass-Steagall Act barriers between commercial and investment banking, and permit financial services firms to affiliate with each other.
But House Banking Committee Chairman Jim Leach, who is co-sponsoring an amendment that broadens operating subsidiary powers to a lesser extent, said the bill is as fair to all industries as possible. "It is the most pro-competitive financial services proposal that we have considered," the Iowa Republican said.
He noted that the Republican leaders of the Banking and Commerce committees support the bill.
To draw the support of influential Democrat Rep. Dingell, they have also proposed an amendment with eight consumer protections governing bank sales of securities and other practices. It would also strengthen the bill's antitrust provisions.
