RECENT wrangling between US Congress sub-committees has caused a major delay in the passage of key legislation that could lift US government restrictions on tie-ups between banks and insurance companies.
House Banking Committee chairman Jim Leach says Congress has now run out of time in the current session to complete its work on the so-called financial services modernisation bill, HR 10. “It is my expectation that work on HR 10 will continue over the recess and financial modernisation will be among the first major issues taken up by the House next year,” he says.
As IMM reported in September, the bill has caused considerable controversy in US financial services, and most commentators were expecting it to be delayed.
If passed, the bill will allow banking, insurance and securities firms to affiliate under umbrella regulation by the Federal Reserve Board.
Sources indicate that the bill was put on the back burner earlier this month after the House Commerce Committee refused to negotiate drafting a compromise bill with the House Banking Committee.
In September a number of top US financial services groups sent a letter to the Commerce Committee outlining their concerns about the bill.