On the eve of the Senate Banking Committee's vote on financial services reform legislation, a pro-bank compromise emerged Wednesday that committee members are seriously considering, lobbyists said.
According to an eight-point plan circulating on Capitol Hill, the committee would revise the House bill by incorporating protections of bank sales of insurance that negotiators from the banking and insurance industries hammered out in New York last week.
The committee is mulling how to settle a disagreement between the negotiators over whether these protections should apply to existing state laws. Options include delaying a provision that would bar state laws that discriminate against banks selling insurance, or restoring special legal authority that helps federal regulators fight such laws in court.
The eight-point plan also would prevent the transfer of ownership of unitary thrifts to commercial companies, eliminate a House requirement that banks provide low-cost checking accounts, and provide community banks broader access to the Federal Home Loan Bank System.
The plan's remaining provisions would make it a federal crime to trick a bank into divulging private customer data, require megamergers of banks with nonbanks to obtain federal regulatory approval, and make technical changes to securities provisions.
The American Bankers Association would consider such a package "a very positive development," chief lobbyist Edward L. Yingling said.
But a Clinton administration veto threat lingers if the bill does not grant full financial powers to direct operating subsidiaries of banks.