Newspaper article THE JOURNAL RECORD

President Threatens to Veto Bank Bill

Newspaper article THE JOURNAL RECORD

President Threatens to Veto Bank Bill

Article excerpt

WASHINGTON (AP) -- President Clinton threatened to veto financial overhaul legislation proposed by Senate Banking Committee Chairman Phil Gramm, saying it fails to fully protect consumers and would hurt community lending laws.

At the same time, Treasury Secretary Robert Rubin on Wednesday expressed the administration's "strong support" for a bipartisan compromise bill in the House.

The Clinton administration supports in principle legislation to lift the Depression-era barriers between banks, securities firms and insurance companies. But the White House has threatened to veto several versions in recent years that took an approach it rejected. The proposal drafted by Gramm, R-Texas, is more in line with the views of Federal Reserve Chairman Alan Greenspan than those of the administration. The bill calls for most new financial activities to be conducted by affiliated companies within bank holding companies. In a letter to Gramm, Clinton said his proposal would "undermine the effectiveness of the Community Reinvestment Act..., a law that has helped to build homes, create jobs and restore hope in communities across America." In addition, Clinton wrote, the bill would "provide inadequate consumer protection." His letter, dated Tuesday and released Wednesday, did not elaborate on that point. "I will veto the bill if it is presented to me in its current form," the president said. Gramm, in response, insisted that his proposal would not weaken the community investment law that banks must follow, but would "restore its integrity." The 1977 law requires banks and thrifts to lend to the poor and minorities in their neighborhoods. Gramm's opposition to the law led him to block financial overhaul legislation in the Senate's waning days last fall. The legislation had earlier squeaked through the House by one vote. Under his new proposal, banks would not have to get a satisfactory community-lending rating from the government to set up holding companies to conduct new financial activities. "Financial services modernization is of such overriding importance to the national economy that President Clinton will be compelled to sign" the bill, Gramm said in a statement. …

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.