Newspaper article THE JOURNAL RECORD

Banks' Lending Would Affect New Investments under Bill

Newspaper article THE JOURNAL RECORD

Banks' Lending Would Affect New Investments under Bill

Article excerpt

WASHINGTON (AP) _ Banks with unsatisfactory records of lending to poor people and small businesses would face difficulty obtaining new investment opportunities under a measure adopted by a House panel Wednesday. The provision, sponsored by Rep. Joseph P. Kennedy II, D-Mass., adds restrictions to a Bush administration proposal to lift remaining barriers to interstate banking within three years and allow banks to enter the securities and insurace businesses. The House Banking subcommittee on financial institutions adopted the mea- sure on an 18-17 vote, with all but one of the 36-member panel's 14 Republicans opposing it. However, the subcommittee defeated what the administration considers a far more damaging amendment on a 24-12 vote. Sponsored by Rep. Bruce Vento, D-Minn., that measure would have allowed interstate banking only in states that decided to join the system. It was supported by groups represent- ing small banks, consumers, farmers and state and local governments. They fear interstate banking will allow big banks to gobble up small institutions, drying up credit in small towns and rural areas. But administration supporters argued Vento's amendment would have allowed the existing patchwork of laws to continue. They said interstate banking would save billions of dollars a year for banks that use awkward holding com- pany structures to operate across state lines. It also would allow banks to be less dependent on the economy in a single region, they said. Kennedy's amendment would require regulators to review banks' lending records before allowing them to enter the securities or insurance businesses or expand across state lines. Banks also would be required to pledge to maintain or improve that record. …
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