Bankers received mixed news Thursday from Capitol Hill, as the House voted 357 to 70 to approve a sweeping credit card reform bill, while the Senate rejected a measure that would have let judges modify mortgages in bankruptcy.

Though the Senate was also close to approving a measure to help the banking industry by allowing the Federal Deposit Insurance Corp. to extend its borrowing authority, the rhetoric in both chambers was often caustic, showing how much lenders are under siege.

"I sat down two years ago with the banking industry and said we've got guarantees, from acting to finally bring about the loan modifications they have been promising for two years now," he said.

Though the Senate rejected the bankruptcy provision, it continued to debate an underlying housing bill that would make improvements to the Hope for Homeowners program and increase the FDIC's borrowing authority to $100 billion from the Treasury Department. The bill, which is expected to pass sometime next week, would allow the agency to borrow as much as $500 billion in certain circumstances. It would also increase the deposit insurance limit to $250,000 for another four years. That limit is due to revert to $100,000 at yearend.

The banking industry has pushed for the FDIC bill, because agency officials have pledged to cut a planned 20-basis-point premium by at least half if it gets more borrowing power.
Despite the defeat of cramdown legislation, bankers took a big hit on card legislation.

The House bill, sponsored by Rep. Carolyn Maloney, D-N.Y., passed with broad bipartisan support, including more than 100 Republicans, and was amended to include several provisions to toughen its standards.

During the vote, the House adopted a slew of amendments sought by the White House.

One amendment, passed by a vote of 284 to 149, would require cardholders to get customers' permission before charging them over-the-limit fees. Another, which passed 276 to 154, would limit college student card accounts to $500 or 20% of the student's annual income, whichever is higher.

Other amendments sought by the White House were adopted by voice vote. They would require teaser promotional rates to be offered for at least six months and would require payments to be applied to the highest-rate balances first. The Senate is expected to vote on its credit card bill this month.

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