Senate Banking Panel Adopts Reform Bill

The Senate Banking Committee, voting 11 to 9 on party lines, adopted legislation to revamp the financial services industry but failed to include the consumer protections and other provisions that President Clinton has said are necessary to avoid a White House veto. The bill, championed by committee Chairman Phil Gramm (R-Texas), and similar to a more bipartisan bill working its way through the House Banking Committee, would enable banks, securities firms and insurance companies to expand into one another’s businesses more easily than current law permits. It would create financial supermarkets where consumers could have checking and savings accounts and could buy stocks and bonds, mutual funds and a variety of insurance policies. Republicans voted down a substituted bill offered by the committee’s senior Democrat, Sen. Paul S. Sarbanes of Maryland, that also would have revamped financial services law but would have preserved requirements in current law that banks must invest in poor communities. On Wednesday, Clinton sent a letter to Gramm warning that he would veto Gramm’s legislation if it passed Congress, saying tht, among other issues, it weakened those community investment requirements.