The House Banking Committee will vote today on a stripped-down version of the bank reform bill, which has already suffered two damaging defeats on the House floor.
The measure would provide $70 billion in new borrowing authority for the deposit insurance fund, which protects deposits up to $100,000. Without the new money, the fund is expected to run out of money by year’s end to shut down insolvent banks.
The financial rescue, combined with some added authority for federal regulators to intervene at troubled institutions, is likely to be all that remains from a once-ambitious plan by the Bush Administration to give banks broad new powers to enter fully into the insurance and securities business and to move unhindered across state lines.
The first two versions of the reform bill to reach the House floor were killed after divisions between big and small banks, and fights among bankers, insurance agents and Realtors.
The Bush Administration still seeks a broad grant of new powers to the banks, but this goal seems increasingly unattainable with Congress rushing to adjournment for the year.