WASHINGTON - Legislation providing banks with regulatory relief could be approved by the Senate as early as next week.
The package would cut the industry's paperwork, space out exams for small banks, protect institutions from environmental lender liability, and offer a number of other regulatory breaks.
Senate Banking Chairman Alfonse M. D'Amato plans to bring the bill to the floor before Christmas, staffers said. The New York Republican has sent the legislation to the Congressional Budget Office, which must review the bill to determine its impact on the federal budget.
Though the current bill is watered down from a version introduced earlier this year, banking lobbyists are eager for Senate passage.
"We've got a bill that contains significant and much-needed regulatory reform," said Peter Kravitz, lobbyist for the Independent Bankers Association of America.
Nevertheless, he said the bill was "severely wounded" because it contains no relief from Community Reinvestment Act rules and fails to remove major Truth-in-Savings disclosure requirements.
Some bankers are also upset by an addition to the bill that would require disclosures to consumers about their credit reports.
Small and medium-size banks will find the credit reporting requirements onerous, said Karen Petrou, president of ISD/Shaw Inc. Large consumer lenders, however, support the rules because they clarify ambiguities in current law. "There are split views on the fair credit measure. That's been one of the problems with the bill," she said.
Lobbyists said they will push to amend the regulatory relief package during the floor vote or later when the House considers similar legislation.
"There is potential to add some things back in," said Edward L. Yingling, chief lobbyist for the American Bankers Association.
Favorable provisions in the Senate bill include:
*Extending the examination cycle for healthy banks with assets of less than $250 million to two years.
*Expanding the exemption from Home Mortgage Data reporting to banks with $50 million in assets or less, up from $10 million.
The House regulatory relief bill is attached to legislation that would repeal Glass-Steagall restrictions on securities underwriting by banks. That package is stalled as bankers and insurance agents wrangle over a provision freezing the Comptroller of the Currency's ability to expand bank insurance powers.
Separately on Thursday, Rep. Richard Baker told a Women in Housing and Finance luncheon that he expected the House to approve the regulatory relief bill in January.
However, the Louisiana Republican described House Banking's progress on financial services legislation as "filled with frustration and defeats." House leaders axed a Baker amendment from the banking package that would have allowed banks to affiliate with insurance companies.
"If we don't take dramatic action to free the markets from their regulatory constraints, we may see a continued escalation of the downward path of assets in American financial institutions," Mr. Baker said.
Olaf de Senerpont Domis contributed to this story.