WASHINGTON -- The Bush administration's sweeping plan to overhaul the nation's banking system received a decidedly cool reception yesterday in the Senate Banking Committee, raising serious doubts about whether the full proposal can win congressional approval this year.
At a hearing, both Democrats and Republicans expressed concern over President Bush's proposals to give big commercial businesses the power to buy banks, to allow banks to move fully into the business of securities and insurance, and to permit unrestricted movement by banks across state lines.
Congress wants a guarantee that "any new powers" for banks "do not bring new risks," Sen. Donald W. Riegle Jr., D-Mich., the committee's chairman, told Secretary of the Treasury Nicholas F. Brady, who pleaded the administration's case for the plan.
"We need to make sure we have learned the lessons of the savings and loan crisis," Mr. Riegle said. He said S&Ls; lost billions of dollars in the 1980s after moving into high-risk investments far removed from traditional home mortgages.
Sen. Paul S. Sarbanes, D-Md., concerned that corporations acquiring banks could dip into the banks, for financial help, told Mr. Brady, "You recommend changes that will heighten risk."