WASHINGTON — The House today defeated an attempt to blunt the key reform in savings and loan bailout legislation after President Bush threatened to veto a watered-down bill.
The vote was 326 to 94, with 114 Republicans and 212 Democrats supporting the President. Fifty-six Republicans and 38 Democrats opted to support the S&L industry on the heavily lobbied issue of capital.
Bush is insisting that the government force S&Ls to back their lending with more of their own capital.
Rep. Henry J. Hyde (R-Ill.) tried unsuccessfully to provide an exemption for S&Ls that previously received an accounting break, known as "supervisory good will," in exchange for taking ailing institutions off the government's hands in the early 1980s.
The accounting break allows some of the acquiring S&Ls to operate without risking any of their owners' money. Hyde's amendment would have permitted 241 S&Ls that would fail tougher capital standards to appeal administratively for an exemption.