THE Senate Nov. 6 begins action on its broad bank reform bill.Bank analysts said the Bush administration would try to influence the legislation in hopes of getting a final bill that frees banks to compete with securities and insurance firms. The House, under heavy pressure from the Bush administration and big banks, voted overwhelmingly Nov. 4 to reject a massive overhaul of the banking system that would have been the first since the Great Depression. The 324 to 89 vote found Democrats joining Republicans to defeat a package that had become highly divisive and unpopular after more than 10 months of debate. The defeat of the bill setback the effort to get a broad package of bank reforms through Congress and was seen as a victory for the Bush administration. The administration originally offered broad banking reforms that would have given banks the right to sell insurance and stocks and otherwise expand their activities. But divisive debate on Capitol Hill led to a gradual narrowing of what banks would be permitted to do. The House bill became so restrictive that big banks and the administration sought to kill it. Some type of bank bill is needed this year to funnel a $70 billion loan to the Bank Insurance Fund, which closes and sells off failed banks. Treasury Secretary Nicholas Brady said after the House vote he still intends to work for an acceptable package. "Before Congress adjourns [it needs] to pass true reform. A narrow recapitalization of the Bank Insurance Fund will only delay the day of reckoning," he said. But key House leaders rejected the idea of expanding banks powers to enter the securities and insurance business without imposing strict limits on the business links between federally insured banks and any new affiliates. Many House Democrats were concerned that expanding banks' powers could lead to more failures in the already troubled industry and a repeat of the crisis in the thrift industry. "If they want any more" than shoring up the insurance fund, "any more goodies must be concomitant with responsibilities," said Rep. Edward Markey (D) of Massachusetts, who heads a finance subcommittee. The Senate bill would allow interstate banking, as does the House bill, but would apply less stringent barriers to mergers between banks and securities firms.