WASHINGTON (Reuters) - A decision by the U.S. Senate on Tuesday to set aside a terrorism insurance bill until 2015 has killed, for now, a provision requiring that one seat on the Federal Reserve’s board be dedicated to a person with community banking experience.
Congress moved a step closer last week to mandating a seat on the central bank’s seven-person board be given to someone who had worked or supervised small banks when the House of Representatives approved terrorism insurance legislation with the measure attached.
Senate Majority Leader Harry Reid had wanted to bring the House bill up for a vote this week but it foundered over opposition to other provisions.
A number of lawmakers have pushed the White House this year to fill one of the two empty Fed board seats with a community banker. Advocates for such a move argue that small lenders need representation at the Fed to ensure the sector does not suffer excessive regulation as the central bank put in place new banking rules in the wake of the 2007-2009 financial crisis.
The provision could easily be revived next year. A version of the terrorism risk insurance bill the Senate had previously passed also included the community banking measure, suggesting little firm opposition.
Reporting by Michael Flaherty; Editing by Ken Wills