BANK BILL OVER HURDLE; HOUSE PANEL ENDS DEADLOCK.

Byline: Marcy Gordon Associated Press

The House Banking Committee, breaking a deadlock over consumer privacy, on Thursday overwhelmingly approved legislation to lift Depression-era barriers between banks, securities firms and insurance companies.

The panel voted 51-8 to adopt the complex measure and send it to the full House. The Clinton administration has expressed strong support for the bipartisan bill but has threatened to veto financial overhaul legislation pending in the Senate.

``I think we have an excellent bill that will be signed into law,'' Rep. John LaFalce of New York, the committee's senior Democrat, said after the vote. ``We have a bill that brings us into the 21st century (and) protects and promotes consumer rights.''

As Congress tries again to overhaul the financial services laws and allow the three industries to get more deeply into each other's businesses, there have been fears about how customer information will be shared among affiliates of the big new companies.

The Banking Committee spent three days laboring on a draft of the bill. As the drafting proceeded Thursday, lawmakers and aides worked feverishly behind the scenes on a consumer privacy measure to be attached to it.

One of the privacy measures proposed, authored by Reps. Jay Inslee, D-Wash., and Robert Weygand, D-R.I., would have required new financial conglomerates to give consumers the right to opt out of arrangements for sharing of all of their personal data with affiliated companies.

Such an ``opt-out'' is considered less stringent than an ``opt-in,'' which requires a consumer's express written consent before personal data can be used by a financial institution or disclosed to others.

But the lawmakers voted, 52-6, to adopt a milder proposal by Committee Chairman Rep. James Leach, R-Iowa. It would restrict the sharing of customers' health information among affiliated companies but would allow their transaction data, such as checking account history, to be shared even if they made an opt-out request. Under current law, opt-out requests apply to a consumer's credit history but not to his or her transaction data.