Magazine article American Banker

11th-Hour Fight over Student Lending Shapes Up for House-Senate Tax Talks

Magazine article American Banker

11th-Hour Fight over Student Lending Shapes Up for House-Senate Tax Talks

Article excerpt

WASHINGTON -- With the House and Senate preparing for negotiations on President Clinton's deficit-reduction package, bankers are gearing up for a fight on student lending and the tax treatment of acquired deposits.

The Senate bill, which was completed early Friday morning, is different from the House version on both issues. Negotiators from the two chambers will have to settle on identical language in the weeks to come.

The House-approved bill calls for the end of the existing guaranteed student loan program in favor of a system in which the government will lend money directly.

Market Share

The Senate bill would test direct government lending for four years, but would not permit the government's share of the market to exceed 50% unless a presidential commission agreed the system were working satisfactorily.

The compromise that appears to be shaping up would maintain most of the Senate version but set 50% as the minimum, rather than the maximum, for the fourth year, according to Karen Shaw, president of the Institute for Strategy Development in Washington.

"The House and the administration are digging in their heels on this one," said Joe Belew, president of the Consumer Bankers Association. "We'll just have to see what happens."

Also up in the air is the treatment of core deposits. The House measure would provide for the amortization of intangible assets, including core deposits, over 14 years.

The Senate agreed on the 14-year period but "carved out," or exempted, purchased mortgage servicing rights from the schedule. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.