Though the Clinton administration still opposes some provisions, Treasury Under Secretary John D. Hawke Jr. on Monday urged the House to approve financial reform legislation this year.
"This is a fixable bill," Mr. Hawke said in an interview. "If it's not done, the delay into next session will threaten the viability of the legislation."
If the House does not approve financial reform this year, passage may be postponed until spring. "That would not leave an awful lot of time for the Senate to get its work done." Mr. Hawke added.
Two versions of the bill have been approved by the House Banking and Commerce committees. House Rules may vote on a compromise measure this week, and GOP leaders have been pushing hard to get that legislation to the floor this year. However, time is running out, and many difficult issues remain unresolved.
In the face of long odds, Mr. Hawke said he is optimistic. "Whether they get it to the floor depends on when the adjournment is going to be," he said. "If it's next week, I think there is a very good chance."
Congress is still scheduled to adjourn Friday, but that could be pushed back as late as Nov. 21, congressional sources said Monday.
The reform package pending in the House would permit banks, securities firms, and insurance companies to own each other. It also would abolish the thrift charter. While many bankers support these changes, the industry is opposing the bill. One big reason is the measure would bar the Comptroller of the Currency from authorizing new activities in national bank subsidiaries.
Contrary to Mr. Hawke's comments, sources at the Comptroller's Office said privately last week that the legislation is beyond repair. These sources, who would not speak on the record, said the administration would veto the legislation if it reached the president's desk in its current form.
While agreeing that the House bill has serious flaws, Mr. Hawke dismissed talk of a veto at this stage in the process as "silly."
"Our attitude is, we want to support the process, we want to improve the bill," Mr. Hawke said. "We've got to have something to work with."
The administration has made it clear to House leaders what changes are needed to gain the administration's support.
"We cannot support a bill that discriminates against national banks," he said. "The key to our support is going to be parity of authority for operating subsidiaries to engage in the same range of activities that holding companies engage in."
Mr. Hawke said he is encouraged that the House will meet the administration's demands.
"The leadership is very well aware of our concerns," he said. "I think they intend to be responsive."
Separately Monday, Sen. Lauch Faircloth delighted thrift executives gathered in San Francisco for the America's Community Bankers annual convention.
"I am adamantly and vehemently opposed to eliminating the thrift charter," the North Carolina Republican said in a speech. "I will use everything I can to stop a bill that does that."
While Sen. Faircloth said he supports the broader goal of the reform package, he said Congress must retain a form of institution that specializes in housing loans.
"We cannot eliminate one charter that has the basic commitment to housing," Sen. Faircloth said.
In addition, it is unfair to eliminate an industry that last year paid $4.5 billion to rescue the Savings Association Insurance Fund, he said.
"You all just spent $4.5 billion making savings and loans secure, and now there are some who are talking about eliminating the charter," Sen. Faircloth said. "It will not happen."