After a grueling debate, the House Banking Committee approved a broad deregulation bill Thursday that would exempt many banks from a major fair-lending law and permit banks to buy insurance companies.
The Consumers Union called the bill a “hodgepodge of consumer law rollbacks.” Treasury Secretary Robert Rubin said the latest version of the bill was “strongly objectionable” and said he would recommend that President Clinton veto the measure.
The panel voted 27-23 to send the bill to the House floor, where it faces an uncertain fate.
In a surprise twist, the panel approved an amendment Wednesday to let banks affiliate with insurance companies, subject to state law. That would dramatically expand banks’ reach in the financial services business.
Changes to the bill were so substantial that the banking industry’s main trade group, the American Bankers Association, wasn’t ready to take a position on the measure because of conflicting insurance language.
The latest version of the bill would:
No longer prevent the Justice Department from initiating lending discrimination cases under the Fair Housing Act, a major tool for policing unfair banking practices.
Retain the current $50 limit that consumers may pay for misuse or irresponsible handling of their credit cards or ATM cards. The original bill would have raised the limit to $500.