Point man on RTC bill looks to wider issues.

WASHINGTON Rep. Stephen L. Neal wiped out big time while surfing in ocean waters churned by incoming Hurricane Emily, but he came back strong two weeks later to steer the Resolution Trust Corp. funding bill through even trickier waters.

WIth one arm still in a sling to protect a shoulder dislocated in the surfing accident, the North Carolina Democrat pushed the the controversial $26.3 billion funding measure to a narrow 214-208 victory on the House floor Sept. 14

RTC votes are always tough, and Rep. Neal hopes he won't have to bring the bill up again, as would be necessary if the House and Senate meet in conference to iron out a final bill.

"O really want the Senate to just take up the House bill and pass it," the soft-spoken lawmaker said in his gentle drawl.

Broad Agenda

That may be wishful thinking, but there's nothing Rep. Neal would like more than to close the book for good on RTC funding and turn to other matters.

As chairman of the House Banking subcommittee on financial institutions, the 10-term veteran has a host of issues in mind ranging from interstate branching to regulatory relief.

"If I could do what I want, I would have a package of bills to clean up the regulatory mess, allow interstate branching, and help community lending," he said in an interview in his office.

A package like that, he said, "would have a good constituency: consumers interested in community development banks, small banks interested in regulatory reform, and of the larger regional banks would be interested in interstate."

But Rep. Neal acknowledges that the realities of the House would make it hard to pass a bill like that, and he said he has yet to make some basic decisions on when to deal with interstate and what to package with it.

Tactical Question

His top priority is interstate branching, an issue important to the large regional banks in his home state. However, he said he has not decided whether to try to move interstate as a separate measure or as part of another bill, such as President Clinton's community development bank legislation.

The community development bank bill makes sense, he said, but he isn't sure he can overcome the administration's desire to keep amendments off the high-priority measure.

"I don't know" he said when asked if he plans to move it as a freestanding measure. He said, however, he hopes to bring it to a vote in this Congress -- and even "this year, if possible."

Rep. Neal has no doubt about the merit of his cause, however.

"When people take a look at interstate, they see it is an attempt to make the system more efficient and stronger," he said.

A moderate, pro-business Democrat, Rep. Neal was the chief advocate for the S&Ls in their quest to limit an industry-financed rescue of the thrift insurance fund in 1987. He has been an ardent defender of the Federal Reserve System, and a staunch ally of banks and thrifts in their quest to ease what they term "regulatory burden."

Regulatory Overkill Seen

Current regulation of banks, he said, "amounts to massive overkill" that is strangling the economy.

Much of the paperwork for loans and new accounts is ignored by consumers, he said. "No one's reading the paperwork," he said. "It's just bogging the banking system down."

Rep. Neal said the principal regulatory relief measure pending in the House -- a bill introduced by Rep. Doug Bereuter, R-Neb., and Rep. Jim Bacchus, D-Fla. -- "is a good start, but it frankly goes too far in some areas" for most committee members.

Still, he said, the Community Reinvestment Act "is just too dogmatic" and could "stand some revision." Proposals to create a safe harbor under the act for banks with "outstanding" ratings "seem reasonable," he said.

Once lingering issues like interstate and regulatory relief are addressed, he said, he'd like to consider some bigger questions. "I would like us to take an overall look at the structure of our financial services industry and see if there is some way we could make it function better."

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER