Treasury Secretary Robert E. Rubin on Thursday rejected community group demands that any financial reform bill extend the Community Reinvestment Act to securities and insurance firms.
Speaking at a National Community Reinvestment Coalition conference, Mr. Rubin said it would be unfair to impose the law on them because they lack access to the discount window and deposit insurance.
But he said the administration was open to applying the law to bank- owned mortgage companies.
Earlier at the conference, community activists blasted the financial reform bill pending in the House, saying it would cripple redevelopment efforts by allowing banks to conduct more activities in subsidiaries not subject to community reinvestment regulations.
"Our communities have had credit turned on for the last five years," said Irvin Henderson, director of the Community Reinvestment Association of North Carolina. "We cannot now turn it off because of financial modernization."
"We need to tell the lawmakers that we will throw sand in the gears until they get a community-friendly approach," said Hubert Van Tol, director of Bank Watchers, Sparta, Wis.
Activists also opposed linking the banking, securities, and insurance industries, saying that would only encourage bankers to illegally require consumers to purchase insurance and securities in order to get loans.
Bankers at the meeting questioned the community groups' focus on financial reform. Mike Mantle, president of Bank of America's community development bank, urged activists to focus instead on expanding the low- income-housing tax credit.