House Approves 2 Wide-Ranging Banking Bills : Congress: One would repeal interstate restrictions, the other would encourage lending in distressed areas.

The House approved two wide-ranging banking bills Thursday, one repealing decades-old restrictions on interstate banking and the other encouraging lending in distressed communities.

The interstate measure, approved on a voice vote, dismantles legal barriers dating to the 1920s and is expected to accelerate the already-rapid pace of consolidation in the industry.

The second bill, passed 410 to 12, is a watered-down version of what President Clinton proposed in his 1992 election campaign. It authorizes spending $382 million over four years to encourage lending in inner cities, poor rural areas and Native American reservations.

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Clinton originally envisioned spending nearly $1 billion to create 100 for-profit banks specializing in community development lending. However, most of the reduced amount in the bill would be spent on grants to existing lending organizations, many of which are nonprofit.

Up to a third could be spent on deposit-insurance subsidies to non-specialized commercial banks and savings institutions that increase their lending in distressed neighborhoods.

Both bills represent compromises worked out last week in a conference committee of House members and senators.

Approval by the Senate, expected within the next two weeks, would send the bills to Clinton, who is expected to sign both. However, there is a chance the interstate measure could be delayed in the Senate.

Sen. Phil Gramm (R-Texas) is threatening to use parliamentary tactics to hold up final passage. He objects to a provision overturning a court decision that erodes Texas home foreclosure protections that also prevent homeowners in the state from obtaining home equity loans.

Interstate banking advocates say the measure would make banking more convenient for the 60 million Americans who live in metropolitan areas straddling state borders.

“For the first time, consumers will be able to do their banking at whatever branch is most convenient to them, be it across town or across the country,” said Rep. Stephen L. Neal (D-N.C.)

Proponents say lifting interstate barriers will produce a banking system less prone to failure and better able to lend in good times and bad. Opponents warn it would mean fewer and bigger banks, more layoffs of bank employees and less control over lending by local bankers.

“This legislation may actually be a boon to big banks but a bust to consumers. They could end up having credit decisions made by lenders who sit in offices thousands of miles away,” said Rep. Joseph P. Kennedy II (D-Mass.)