Senate Approves Banking Legislation

The U.S. Senate passed sweeping legislation to lift Depression-era barriers and let banks, securities firms and insurance companies get more deeply into each other’s businesses. The mostly party-line vote was 54-44 on the bill, which faces a likely presidential veto. The Clinton administration supports such legislation in principle. But in a showdown with Senate Banking Committee Chairman Phil Gramm (R-Texas), it has threatened a veto unless there are major changes, including removal of provisions that Democrats view as an attack on the 1977 Community Reinvestment Act. Proponents of the financial overhaul legislation, led by Wall Street and the insurance industry, maintain it is needed to keep the U.S. financial industry competitive in global markets and that it would save consumers billions. The banking industry already has won permission from regulators in recent years to skirt some of barriers separating financial industries erected by the 1933 Glass-Steagall Act.