Senate Passes Banking Bill, Paving Way for Overhaul; House Backers Trying to Push Through Similar Measure
The Senate yesterday approved a bill that could pave the way for the most comprehensive overhaul of federal banking law in 50 years, giving banks and securities firms broad authority to venture into each others' businesses.</br></br>The legislation, which passed by a vote of 94 to 2, would gradually tear down barriers between banks and securities firms and force banks and other financial service companies to spell out in simple English the costs and potential interest income of checking and savings accounts, certificates of deposit and other products banks sell to the public.</br></br>The obstacle to the banking legislation has been the House, where opponents in the securities and the savings-and-loan industries have had a powerful ally in House Banking Committee Chairman Fernand J. St Germain (D-R.I.). Although the Senate passed banking deregulation legislation once before, in 1984, the House has never done so.</br></br>However, a growing block of House Democrats is attempting to bypass St Germain, seeking support for legislation similar to the Senate-passed package.</br></br>Rep. John Dingell (D-Mich.), chairman of the Committee on Energy and Commerce, which has jurisdiction over securities law, is allowing himself "to be dragged kicking and screaming" to the side of those supporting the Senate legislation, sources said. Dingell has been opposed to banking deregulation in the past.