Senate Banking to Consider Regulatory Relief Proposals

The Senate Banking Committee is expected to begin debating legislation today that would let banks offer interest on business checking accounts and roll back more than 40 other industry regulations.

Though committee Chairman Alfonse M. D'Amato has said he wants the panel to vote on the bill today, prospects for quick action were uncertain Wednesday because the committee may have to wade through 75 amendments that have been filed on the bill.

Staff members for Sen. D'Amato and other committee Republicans met late Wednesday, hoping to cut the total to fewer than 15. However, one controversial issue-a plan to restructure the Federal Home Loan Bank System-is certain to remain on the table. The amendment, sponsored by Sen. Chuck Hagel, R-Neb., would:

Let the 12 Home Loan banks make advances for small-business and community development lending.

Make it easier for the banks to pay the $300 million annual debt service on RefCorp. bonds used to bail out the thrift industry.

Make system membership voluntary for thrifts.

Expand the types of securities investments the banks could make but require more capital.

The Home Loan bank issue could bog down the vote on regulatory relief legislation if a deal is not reached with Sen. Paul Sarbanes. The panel's ranking Democrat has filed four amendments including one that would restrict the Home Loan banks' securities investments. This amendment, designed to address concerns raised by the Treasury Department, would reverse a deal cut by Sens. Hagel and D'Amato.

In a letter to Sen. D'Amato Monday, Treasury Secretary Robert E. Rubin said expanding the Home Loan banks' investments would lead the system "in the wrong direction."

Federal Housing Finance Board Chairman Bruce A. Morrison said he would not oppose that amendment, though he called it unnecessary. "The issue of limiting nonmission investments is solved by reducing the revenue needed to meet RefCorp obligations and changing the capital structure," he said. "But if that's all Treasury needs to get on board, then there should not be a problem."

But Mr. Morrison urged lawmakers to oppose another Sarbanes amendment that would prevent the finance board from delegating management duties to the Home Loan banks.

An aide to Sen. Hagel predicted the amendment would pass, despite strong opposition from the Treasury Department. "The votes are there," the aide said. "We have the support of the chairman."

Other controversial amendments that could tie up the panel include a plan by Sen. D'Amato to ban automated teller machine operators from charging noncustomers. Sen. D'Amato has railed against the charges for two years but has no support from fellow Republicans on the panel.

Sen. Lauch Faircloth, R-N.C., said he would offer an amendment to require federal regulators to review any Financial Standards Accounting Board rule that affects banks.

Though it was unclear Wednesday which amendments would be offered, Democratic lawmakers were floating controversial ideas. Sen. Carol Moseley- Braun, D-Ill., filed 12 amendments that would be widely opposed by the banking industry, including a measure to prohibit credit card companies from targeting fees at customers who pay their balances every month. She also plans to offer an amendment that would make banks offer low-cost checking accounts.

With time running out in Congress, loading down the bill with controversial amendments would erase its already slim chance of passage this year, said banking lobbyist Richard F. Hohlt.

"This train has got so many cars attached, it is hard to see how it chugs across the finish line," he said. "Getting this legislation enacted is a 10% chance at best."

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