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Riegle's new recruits.

Three hundred yellow and red T-shirted singers swayed and clapped and sent forth gospel harmonies that thawed the late winter hearing in the normally staid confines of the Senate Banking, Housing and Urban Affairs Committee chamber. But the troubled souls of some of the witnesses caught off-guard by the commotion were not soothed. The T-shirts offered sermons with attitude, accusing a Georgia lender of second mortgages of loan sharking.

Chairman Don Riegle (D-MI) caught the rhythm, harshly criticizing the lender for 15.9 percent rates, and condemning unscrupulous finance companies that loaded up huge equity loan profits from inexperienced low-income and often elderly homeowners. This is not the sort of issue to bring forth partisan conflict, and Senator Alfonse D'Amato (R-NY) pronounced the practices as "evil, pernicious and unlawful." Even Senator Richard Shelby (D-AL) momentarily suspended his comments on the merits of softened regulations, which once included a characterization of regulators as tyrants of whom bankers are scared to death. "None of us is interested in lifting regulations if that is going to allow exploitation like we've seen here," said Senator Shelby.

The year has offered a number of revealing hearings that, in the aggregate, yield a political profile of a diverse committee that dances less to the tune of partisan discipline than to the vagaries of regional constituencies and personal experience. The legislative gumbo has been spiced by a banking committee chairman who, though frustrated by the budget deficit, is heartened by the arrival of an administration with common concerns, as well as by an influx of intriguing newcomers who significantly broaden the committee mix.

Indications of a new urgency abound, and Senator Riegle is finding such pressure helpful as he attempts to steer an activist but bipartisan approach.

The confirmation hearings

Early cues came from Department of Housing and Urban Development (HUD) Secretary Henry Cisneros who, during his confirmation hearings, noted that the "thunderclap of violence emanating from Los Angeles" has convinced him that "our country is in trouble and that we're running out of time."

But times have changed since the days when Cisneros, as mayor of San Antonio, brought in more than $230 million in HUD loans alone. The fiscal gods smile no more and mayors are unlikely to find such largess again, which puts pressure on the committee to seek creative approaches. Cisneros' evident concern and experience even motivated former HUD Secretary Jack Kemp to testify, "There is one man who was born to be HUD secretary. It's Henry Cisneros. Godspeed." The downside for Cisneros of his impressive performance is that the committee seeks to make him point man for all federal departments that affect urban areas.

The friendly interplay between the committee and the administration was demonstrated by the quick approval of Laura D'Andrea Tyson as head of the Council of Economic Advisors (CEA). Tyson advocates more government-industry cooperation and a national competitiveness policy.

The lone question of whether or not Tyson would continue CEA traditions as "an advocate for basic economic principles...and a strong voice for the free market" came from Senator Kit Bond (R-MO), who received the politic affirmation such questions are designed to elicit. Former Texas Senator Lloyd Bentsen didn't even have a chance to answer a question before he sailed through with a unanimous endorsement for Treasury secretary 20 minutes into his confirmation hearing.

Even the more controversial Roberta Achtenberg, assistant HUD secretary for fair housing and equal opportunity, passed Senate banking committee scrutiny nearly unscathed. The former member of the San Francisco Board of Supervisors introduced her partner, a female California judge. Riegle told her she was "crossing one of those invisible lines that we have in our society...with respect to sexual orientation...someone had to be first and I'm glad it's you." Freshman Senator Lauch Faircloth (R-NC) was her only hurdle.

It was tougher sledding when Achtenberg's nomination hit the Senate floor. Senator Jesse Helms (R-NC) described her as "a militant activist" who wanted society to accept as normal "a lifestyle that most of the world's religions consider immoral," and he added that the Senate would be "crossing the threshold" by confirming her.

Senator Carol Moseley-Braun (D-IL), one of the six freshman on the banking committee, immediately squared off, declaring she was "frightened to hear the politics of fear and divisiveness and of hatred rear its ugly head on this Senate floor." Another committee freshman, Senator Barbara Boxer (D-CA) said the nominee would seek to enforce the nation's housing policy, not try to change laws.

The freshman class

Senators Boxer and Moseley-Braun will clearly not shy away from the effective use of their new forums. Boxer, a former stockbroker and journalist, is seasoned by a decade of liberal activism in the House, and within her first month as senator, Democrats tapped her as Western region deputy whip.

She made her mark as an advocate of military procurement reform, airline safety, environmental protection and human rights. In 1989, she got Congress to pass the first major pro-choice legislation in a decade, though it was vetoed by President Bush. Her activist stance is expected to carry over into the banking arena. With Senators Moseley-Braun, Chris Dodd (D-CT), and Bond, she was an original cosponsor of Riegle and D'Amato's Home Ownership and Equity Protection Act of 1993 that amends the Truth-in-Lending Act to provide additional consumer protections against the problem of "reverse redlining," the targeting of communities for loans with unfair terms and conditions.

Former prosecutor Moseley-Braun, who for 10 years was voted the best legislator by the Independent Voters of Illinois-Independent Precinct Organization, a voters group, came to the Senate from the rough and tumble of Cook County politics where she served as recorder of deeds. She shocked incumbent Senator Alan Dixon by defeating him in the Democratic primary. An African-American, she has also tangled with Senator Helms over the official renewal of a patent on the Confederate flag as a symbol for the Daughters of the Confederacy, lecturing the Senate on the symbol's lingering abrasiveness and quashing the patent grant.

While some observers thought the vehemence of the patent protest rocketed the issue out of context and was perhaps a misdirected use of energy, it certainly spurred some soul searching or at least careful phrasing by other senators. If it allowed Helms to score big in the South, it also underscored that the genteel, to-get-along-go-along way of doing business was not a given.

Recently Senator Helms entered an elevator, found Senator Moseley-Braun inside and ribbed her by singing "Dixie," with the tongue-in-cheek threat to sing until she cried. She replied that it was his singing, not the tune, that might bring tears.

But no chuckles were forthcoming during a hearing on mortgage discrimination, when Moseley-Braun observed that regulatory efforts thus far appeared to lack "any teeth, any muscle, any oomph." She upbraided testifying regulators from the Federal Reserve, the FDIC, the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

Freshman Senator Patty Murray (D-WA), after a brief stint in the state legislature, styled herself as "the mom in tennis shoes" who identified with and reflected the common voter. She quickly gathered a broad coalition to back her successful run. Consumer groups believe that she will join with Senators Boxer and Moseley-Braun to bring the committee increased backing for consumer protection measures.

The fourth Democratic freshman on the committee is a defiantly middle-of-the road eclectic from Colorado--Ben Nighthorse Campbell, a fiscal conservative who seeks a balanced budget amendment. A talented jewelry artisan, rancher and former member of the U.S. Olympic judo team, Campbell was slow to embrace his father's Cheyenne Indian heritage, but now grips it tightly.

He readily states, "I am not an expert on banking, but I have discovered several issues of great interest for me that the committee is dealing with this year. I am concerned about community development issues, as well as discrimination in lending in general, and mortgage lending in particular. Another aim is to shut down the second mortgage scams that are preying on poor people." Campbell also looks forward to "working with Secretary Cisneros on the housing bill." He has brought up some forward-looking proposals, such as tapping into pension partnerships and moving HUD inventory, that the committee will be considering. "Naturally, as the only American Indian in Congress, I also will be focusing attention on Indian housing initiatives this session."

Western perspectives on the committee are well represented. Richard Bryan (D-NV), brings extensive consumer experience garnered while a state attorney general and governor. He enjoys the distinction of being the only freshman (in 1988) to chair a subcommittee, the Consumer Subcommittee on Commerce. Perhaps part of the deal was accepting the thankless job of chairing the Senate Ethics Committee, a role considerably less coveted than the Hope Diamond. One possible source of friction with Senator Campbell is Bryan's opposition to what he perceives as the easier ride Indian gaming operations have compared with the massive Nevada gaming industry.

The two Republican committee freshmen are Senators Lauch Faircloth, (NC) and Robert Bennett (UT). Faircloth is an amiable conservative who transformed a ready-mix concrete business into successful construction and farming operations. His public service includes chairing the North Carolina Highway Commission and serving as secretary of the North Carolina Department of Commerce during an economic boom. The tried-and-true campaign formula used by Faircloth, "cut spending, cut taxes, create jobs and get the economy going," helped defeat former committee member Terry Sanford in a hotly contested Senate race.

According to former banker and Faircloth's legislative assistant on banking Glen Downs, Faircloth's principal concern is federal spending and debt, and his cardinal belief is that taxes, particularly capital gains taxes, have a perverse effect on capital formation and hence on everything including banking. "There's no instance in which he's voted to transfer a penny from private to public sector, and he led the charge against pork-barrel spending in his own state, attacking a proposed addition to an EPA mall in the research triangle." Hence, "he can be counted on to cast a jaundiced eye on virtually any program that spends money."

That was evident when, during Cisnero's confirmation hearing, Faircloth suggested that HUD has too many programs for the homeless and that HUD should offer cuts to reduce the deficit, which prompted Riegle to respond that "no agency in the 1980s was marched to the chopping block more than HUD."

Downs adds that Faircloth is comfortable with interstate banking, as North Carolina was one of the pioneers in intra-state branch banking, and the local industry is comfortable operating the systems necessary for large systems to succeed.

Faircloth's active portfolio includes up to $3 million in North Carolina bank stocks. When questioned recently about the potential conflict of interest, Faircloth replied that the holdings were mostly in state banks that weren't controlled by the "Federal Banking Commission" in any way. Banks are affected by committee activity, nevertheless, and the issue has gotten the attention of such watchdog organizations as Congress Watch, although there is no illegality involved.

Senator Robert Bennett (R-UT) has stepped into the shoes of his father, four-term U.S. Senator Wallace Bennett. He knows the territory, having served as a Hill staffer in the 1960s, including a stint as his dad's administrative assistant. But what impresses his peers is his sizable success as an entrepreneur. He was president of Osmond Communications and chaired the board of American Computer Corporation. He turned around a floundering Microsonics, a public company producing educational audio materials.

In 1984, he became CEO of what is now the publicly held Franklin Quest, taking it from four full-time employees to nearly 1,000 and annual sales of more than $90 million. The company is internationally known for its day planners and time management seminars, which must also impress harried senators and their staffs.

Named as the Rocky Mountain Region's 1989 "Entrepreneur of the Year" by Inc. magazine, Bennett arrived at the committee with instant credibility on small business and entrepreneur issues and is deferred to on related topics. An important issue to Bennett is capital formation.

Bennett's Washington career includes several years as the Washington, D.C. representative for the J.C. Penney Co. and two years as chief congressional liaison at the U.S. Department of Transportation during the Nixon administration. For several years, he operated his own government relations firm, serving clients such as Howard Hughes, General Food and Amtrak. In Utah, Bennett was very involved in education issues and chaired the state's Education Strategic Planning Commission.

Not-so-wild cards

Senate Banking Committee observers, with the caveat that they are often prone to over-analyze, raise interesting questions as to potential influences on the committee's agenda. Though its issues are less partisan than many other committees, it is still subject to the dynamics of political ambition.

Senator Phil Gramm (R-TX) is making no secret of his presidential aspirations, and lobbyists say his increasing preoccupation with Republican Senate politics has distanced him from participation on the committee. That may be because few, if any, committee issues are likely to be strongly affected by a presidential bid. According to Bert Ely, a Washington, D.C. financial institutions analyst, "Banking isn't a very sexy issue. If you run for president, you need key issues, and they're not going to come from banking, aside from the possible charge of strangulating by regulation."

While speculation is floating over a gubernatorial bid by Senator D'Amato (who won't confirm or deny the rumors), the political effect of such a run on the committee is discounted. Senator D'Amato and his staff director, Howard Menell, are generally considered more hardball players than their predecessor on the committee, the former Republican senator from Utah, Jake Garn, and his director, Lamar Smith. But D'Amato has demonstrated a willingness for bipartisan efforts. If anything, a bid for the New York governor's mansion will encourage that to continue.

The ghost of Charles Keating, frequently counted on to rear its ugly head at an inopportune moment during Riegle's upcoming reelection campaign, may be losing his fright potential. It didn't play strongly in the past reelections of Senator John McCain (R-AZ) or John Glenn (D-OH). Since the specter's first appearance, Riegle has accepted no contributions from anyone with business before his committee, a lofty standard not followed by many in the Senate.

The public is receptive to repentance. Senator Riegle has been an unflamboyant but steady plodder on issues important to Michigan, particularly to the hard-times urban areas. He is picking up surprising support from such activists as Deepak Bhargava, legislative director of ACORN, who recently expressed worry over the prospect of losing Senator Riegle because he's "turning out to be a genuine hero...on civil rights issues," adding that there's no senator "more on the right path."

Though Riegle hasn't trumpeted his victories, he is credited with shepherding four major bills through during the Bush administration, including the 1989 Financial Institutions Reform and Recovery Enforcement Act (FIRREA); the 1991 FDIC Improvement Act (FDICIA); the landmark 1990 Cranston-Gonzalez National Affordable Housing Act, which was the most far-reaching in many years; and the 1992 Reauthorization for the Housing and Community Development Act, which also expanded or redefined a variety of programs.

Rare is the politician who seeks strongly controversial issues with such an upcoming election, but Riegle's agenda, including grappling with such tricky issues as reverse redlining, shows he isn't intimidated. Some topics, such as redefining the roles of banks, are slow to move to the front burners because the committee is waiting for the young administration to become more oriented to issues and priorities.

Observers believe that the committee is awaiting a White House consensus on interstate banking, fair trade and financial services, fair credit reporting and lender liability.

Last month, Riegle won his battle to include $1 billion for enterprise zones to revitalize economically stressed communities. The enterprise zone package was included in the budget reconciliation legislation and provides for a total of $3.5 billion in tax incentives and funding. The program has strong potential in Michigan, which won't hurt the banking committee chairman.

As to the voluntary departures of Arlen Specter (R-PA) and Nancy Landon Kassebaum (R-KS), analysts such as Ely, doubt that these will have much impact. But there is some thinking that the reduction of the committee membership from 21 to 19 will give increased importance to the tendency of Senator Richard Shelby (D-AL) to side with the Republicans in opposition to the White House.

Agenda sampler

One of the more interesting political subtexts, and one that does emit a strong partisan ring, was revealed in a March hearing during the rare appearance before Congress of all 12 Federal Reserve regional presidents. From the hearing emerged the clear desire of Democratic Senators Paul Sarbanes (D-MD), Riegle, and Jim Sasser (D-TN) to strip the 12, chosen by local groups of business and banking leaders, of their right to participate in monetary policymaking. The concern is that the Fed's preoccupation with inflation will bring an untimely tightening of the screws, derailing the administration's hope of cutting the deficit while keeping the country out of recession.

House Banking Committee Chairman Henry Gonzalez (D-TX) has the similar goal of making the regional presidents presidential appointees rather than permitting selection by bankers within their regions. The appointees would require Senate confirmation. While this is not a new thought, the goal has seemed closer than usual. The notion of privately chosen officials influencing public monetary policy is a unique arrangement among industrial countries, and it is clearly a sticking point with Sarbanes. According to the senator, "The Federal Reserve is the only government agency in which private individuals make government policy. The regional bank presidents cast very important votes on public policies that affect the economic well-being of all Americans, yet they lack the public legitimacy to be making these kinds of decisions."

Republican discord on this issue came quickly into view during a March hearing. Senator Connie Mack, (R-FL) said the Democratic attempt to change the Fed's structure was a "coup d'etat on monetary policy" and an "arrogant display of congressional power" with the "clear intent to intimidate the Federal Reserve into an easier money supply in order to offset the contractionary effects of President Clinton's high-tax fiscal policy."

Senator Faircloth said that diminishing the political independence of the Fed would be a "recipe for fiscal disaster." Chairman Riegle sidestepped the attack, noting that the power regional bank presidents wielded over interest rates made it vital for Congress and the county to understand their views.

Greenspan's well-cultivated relationship with President Clinton has slowed the momentum of the effort, but it appears likely that reform legislation will continue to hang like a sword from a hair over the 12 in future meetings on monetary policy. Senator Riegle invited them to return in six months for another discussion.

Former Senator and Committee Chairman William Proxmire (D-WI) says he doesn't attribute much likelihood to the regional presidents making sudden moves that might have significant impact on the administration's recovery plans. "The Fed chairman has always called the signals, still does, and that's the way it ought to be."

Proxmire, now writing books on health and on his government experience, is more in tune with Senator Riegle's desire to consolidate regulatory agencies, and is testifying toward that objective this month. Because banks can choose from three regulatory agencies, Proxmire believes that the agencies actually compete for constituencies by making their regulations easy. Arthur Burns called it competition in laxity. It's going to be hard to change because nothing is harder than persuading agencies to give up jurisdiction. It runs against the bureaucratic grain for organizations to give up power by downsizing. Many agencies came about, in part, because they were fiefdoms offering rewards such as political appointments.

Many back Proxmire's long-held view, including Riegle, who sees a system clogged by overly costly rules and regs, varying interpretations of the Community Reinvestment Act (CRA), costly examinations done by multiple agencies and high overhead. The general perception is that there's no excuse in the world for all these agencies. Every commission since 1949, starting with the Hoover Commission, then the Hunt Commission, the Fine Commission and the Grace Commission, have all said that the regulatory system has passed its day. Not long ago, former chairman of the FDIC and RTC, William Seidman, commented that "the financial institution's regulatory system is complex, inefficient, outmoded and archaic. It needs to be reformed with an independent federal regulator. Do not bother to ask federal regulators about it. Their turf is their only message."

A survey of various lobbyists, current and former staffers and analysts has revealed the following patchwork agenda for the Senate Banking Committee in the months ahead. The administration has placed community development banks as its first priority, and Riegle has invested a lot of time in the community development bank bill, which will likely see passage in some form in both the Senate and the House. However, one major change may be on the horizon. Representative Floyd Flake (D-NY) joined by 10 cosponsors including Representatives Jim Leach (R-IA) and Barney Frank (D-MA), has offered HR 2707, which would amend Clinton's proposal by opening eligibility to include existing private-sector banks or at least subsidiaries of them, instead of the totally separate entity proposed by Clinton. Debate is still in a formative stage, but the House could end up carrying the day on this alternative. The bill also seeks to create legislative standards for quantifying CRA performance standards.

The must-do legislation and the committee's first priority is RTC funding. The Senate has passed it twice with a strong bipartisan bill, but it still has problems in the House. Some staffers predict this will get under the skin of the senators, including those off the committee, who feel they've been left hanging politically exposed. House Republicans have flogged the issue to the point of confusing the public by portraying it as a giveaway to banks. The Senate sees it as essential given the inability of the RTC to quickly sell assets and make other moves to successfully put its house in order. Meanwhile, estimates of the cost of delay range from $1 million to $3 million a day. This is an issue that could backfire on those who now take credit for derailing the vote.

The Senate Banking Committee plays a lead role in confirming many new administration officials who must take over the reins of government regulation. The priority is to process nominees as soon as they come before the committee, and it's been done in timely fashion without any backlog. However, this ongoing endeavor swallows a great deal of time and the committee has approximately 55 nominations that could come before it. Not everyone has yet been nominated.

Also, the Riegle-D'Amato bill, known as the Home Ownership and Equity Protection Act, deals with reverse redlining and has strong prospects. The perception remains that predatory loan practices in vulnerable communities are significant throughout the industry, so the issue will continue as a high priority for both the chairman and Senator D'Amato.

Senator D'Amato has also introduced S 384, the Small Business Loan Securitization and Secondary Market Enhancement Act. SEC Chairman Arthur Levitt testified at his confirmation hearing that the bill was consistent with efforts the SEC had taken to promote securitization. The bill has 38 sponsors, and Riegle has indicated it has high priority.

Action on the Community Reinvestment Act must include addressing an alternative by Senator D'Amato that would allow a bank to be judged solely by its investment in a Community Development Bank (CDB) alone if it invests the 5 percent maximum allowed. Senator Riegle isn't likely to be fond of anything that would let banks out of CRA obligations. He doesn't believe 5 percent of core capital is sufficient and doesn't want a two-tiered system that leaves only specialized banks serving low-income communities instead of a mix that includes more traditional banks with a broader range of services and involvement.

Some industry analysts maintain that the requirements most complained about, such as CRA and other consumer protections, actually take the least amount of time. It's the safety and soundness regulations that take the most time.

In any case, Proxmire observes that the savings and loan crisis left a lingering sensitivity. It's unlikely many will hang the banner of regulatory reform on complaints about safety and soundness requirements.

The new committee will likely make it harder to maintain "safe harbors," that would allow banks with satisfactory or outstanding ratings for three years to be shielded from CRA protests by the community if a bank seeks to expand or merge. Opponents would find vigorous allies in the House, such as Chairman Gonzalez, Joe Kennedy (D-MA) (whose consumer credit and insurance subcommittee looks over the CRA) and Bobby Rush (D-IL), the former Chicago Black Panther. Rush charged in a letter to Representative Flake that Flake's "safe harbor provisions would shelter more than $1 trillion of the asset base of insured depositories from public scrutiny as provided for under the CRA." Opponents in both the House and Senate are mindful of the ease with which satisfactory ratings have been sometimes given. Staffers do not sense any movement among legislators to expand CRA to mortgage bankers this session.

Senator Shelby, with cosponsor Connie Mack, has introduced the Economic Growth and Regulatory Reduction Act of 1993, which purports to increase available credit by reducing regulation burdens. It would modify criteria on real estate lending standards; reduce culpability standards for directors and officers; repeal criteria for safety and soundness relating to operational and managerial standards; diminish Truth-in-Lending Act requirements; and require federal acceptance of state examinations of community reinvestment laws. It would also include a large number of other measures that consumer groups say will do little to increase lending and represent nothing more than a wish list for banks. While there is broad consensus that regulators have gone overboard with paperwork requirements, most observers predict this bill goes way out of balance and will get a very hard look. Despite 50 Senate cosponsors and 260 House cosponsors, the misgivings many sponsors have about some of the 84 provisions mean the bill will not go far without substantial revisions. Proponents intend to eventually tack the surviving portions on to the Community Development Bank bill, which will be the main legislative vehicle. There are a half dozen regulatory relief bills from the Senate at large, so there is likely to be a lot of mixing and matching in the process.

Ironically, one of the most significant legislative actions is a done deal that went unnoticed. When the budget bill was passed, it included section 3001, the National Deposit Preference provision, which Ely calls "the most significant alteration of deposit insurance since 1933." Immediately effective, it changes the priority in which people are paid off when banks become insolvent. The provision gives a preference to all domestic deposits, insured or uninsured. The latter group should be safe at least in the larger banks, as the change probably beefs up the concept of "too big to fail." The second preference group includes all other creditors. The provision is designed to reduce the amount of loss the FDIC takes in failed banks. The Congressional Budget Office estimated the budget savings from the provision during the next five years at $750 million, but other analysts say the figure is closer to $150 million. The provision makes the FDIC, which had been gaining power relative to other regulators, less significant. But analyst Ely figures it will probably bring a relative increase in power to the Fed.

There will be an upcoming markup on S 1299, the Housing and Community Development Act of 1993, which includes multifamily disposition, but housing reauthorization which comes due in 1994, has no date yet set for markup.

Last year's legislative accomplishments included a statute requiring that Fannie Mae and Freddie Mac meet affordable housing purchase goals in the inner cities and distressed areas. Their performance is likely to be closely watched both by Senator Sarbanes' housing subcommittee and by the full committee to ensure that more is done to improve the plight of inner cities. There is a consensus that as the agencies have government protections not afforded other corporations, they accordingly have government responsibilities that the committee will require them to fulfill.

Senator Sarbanes, chair of the Housing and Urban Affairs Subcommittee, appears to be focusing on improving and simplifying the HOME Program that attempts to improve access of poor households to affordable housing. The revitalization of severely distressed public housing is also on his plate, and he is examining the factors that spell success or failure in public housing.

With a reputation as one of the Senate's most conscientious and cerebral members, as well as one who shuns publicity, Sarbanes isn't expected to make a move until he is comfortable that he knows exactly what he is doing. Until then, his cards are close to his vest. One matter he has commented on is his and Riegle's recently introduced bill that aims to correct problems in the HUD multifamily insurance program.

Adopting recommendations by Secretary Cisneros, the bill would relieve HUD of some subsidy requirements that have led to a growing backlog of defaulted HUD-owned properties. "This legislation contains the kernels of solutions to some of the more vexing management problems facing |HUD~," says Sarbanes. The bill contains "initiatives relevant to spatial deconcentration, initiatives to counter destructive individual behaviors and initiatives to provide a sense of economic lift in HUD's programs. The bill will allow a greater mix of incomes in HUD-supported housing projects, expand anticrime efforts in public housing and provide an incentive for public housing residents to go to work."

The fall of 1993 finds the banking committee more receptive to White House initiatives and vice versa. Groundwork for bipartisan approaches to the committee agenda is more solid than in the Senate as a whole, particularly regarding abusive lending practices. The great debates over the roles of banks are not audible this year. In the past, initiatives that redefine banking roles came from the Treasury, not Congress, and they are not on the administration's agenda. They're also not a high priority of the banking industry, whose diverse segments have found unusual alignment behind regulatory relief. The committee will thus seek a pragmatic balance between the concern for regulatory relief and strong attention to consumer issues. It will also try to ease the credit crunch without giving bankers enough rope to get into mischief.

The committee machine may not end up turning out the spiciest sausage in the coming session, but it will at least continue cranking. That counts, when the Senate at large appears limited to a dance within a tightening circle of special interests. The central question of legislative overload and how government will cope as its tasks slowly exceed its abilities, seems to spare the banking committee for the moment, though housing issues might bring that question forward. Moving cautiously, banking committee members are increasingly mindful that, as Ely puts it, "bad law quickly brings forth powerful constituencies that support it."

Skip Kaltenheuser is a freelance writer based in Washington, D.C.
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Title Annotation:Don Riegle; Chairman, Senate Banking Committee
Author:Kaltenheuser, Skip
Publication:Mortgage Banking
Date:Sep 1, 1993
Previous Article:Money and politics.
Next Article:Washington's new numbers game.

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