Banking Bill Negotiators Set Compromise --- Plan to Widen Banks' Entry To Securities Business Is Dropped as Vote Nears
WASHINGTON -- In an effort to achieve banking reform, Senate negotiators and the Bush administration have agreed to drop efforts to allow banks to expand further into the securities business.</br></br>The compromise is one of several the Senate Banking Committee is pursuing to remove obstacles its banking bill will face when the Senate starts voting on the measure, perhaps today. The latest version of the House banking bill also drops the administration's proposals to broaden bank entry into the securities business.</br></br>Last night, the House began its second attempt to pass a banking bill after failing last week, in part because of disagreement over how to allow banks into the securities business. The House adopted on a voice vote provisions that would replenish the bank deposit insurance fund, tighten bank regulation, trim the scope of deposit insurance, and restrict the Federal Reserve Board's ability to keep sick banks alive with loans.</br></br>But the House delayed until today a vote on an amendment to allow banks to branch nationwide and on final passage of the banking bill to give the House leadership and the administration more time to drum up support for the bill.</br></br>House Speaker Thomas Foley (D., Wash.) is working hard to win passage of the bill in the face of significant opposition from Rep. John Dingell (D., Mich.), who believes the bill should include provisions imposing stiffer regulation on banks in the securities business.