WASHINGTON -- Senate Banking Committee Chairman Donald W. Riegle Jr.'s surprise announcement on Tuesday that he will not seek a fourth term in 1994 has bankers hoping that he will devote more time to banking legislation.
Sen. Riegle now will have "fewer political concerns and so he may decide he wants to move banking legislation at this point," said Donald G. Ogilvie, executive vice president of the American Bankers Association.
Many bankers especially hope that Mr. Riegle will allow changes in the tough Federal Deposit Insurance Corp. Improvement Act of 1991. Sen. Riegle and his staff wrote major portions of the law that bankers claim is strangling them with red tape. However, up to this point, he's shown no inclination to roll back any of its provisions.
Critic Fails to Get Post
In fact, Sen. Riegle is believed to have derailed the candidacy of FDICIA critic Christopher Gallagher of New Hampshire to head the FDIC.
Nevertheless, Kenneth Guenther, executive vice president of the Independent Bankers Association of America, insists that Sen. Riegle should endeavor to ease FDICIA rules.
"The regulatory overkill was based on the false premise that a taxpayer bailout of the FDIC's Bank Insurance Fund would be necessary. The chairman's legacy should not be an oppressive regulatory system that lengthens the credit crunch and stifles bank's ability to make job-creating loans," Mr. Guenther said.
Taint of |Keating Five'
Sen. Riegle's announcement was a shocker because his reelection seemed assured despite his involvement in a 1987 scandal that would not go away: He was one of the "Keating Five" senators who ran interference against the regulators for the rogue thrift operator and accepted $78,000 in political contributions from him as well. The Senate Ethics Committee rebuked him for his role.
However, the Republicans had not come up with a viable candidate in Michigan, and Mr. Riegle had very strong support from organized labor, especially since he began campaigning against the North American Free Trade Agreement.
People who are close to the senator said his decision following the Keating Five scandal not to accept campaign contributions from industries dealing with any committee on which he served may be one reason for his retirement.
They said he also wasn't looking forward to waging what undoubtedly would become a "dirty campaign" focusing attention once again on his relationship with Mr. Keating.
Always a vocal critic of former presidents Bush and Reagan, Riegle has been a strong advocate of President Clinton. The senator has championed Clinton's economic, fiscal, and financial services policies, but recently fell out with the White House over the proposed free trade agreement with Mexico.
Assuming the Democrats control the Senate again after the 1994 election, Sen. Paul Sarbanes of Maryland would succeed Mr. Riegle as chairman. Sen. Sarbanes' reelection in 1994 is considered a "slam dunk" by political experts.
Sen. Sarbanes has been a vigorous and articulate critic of the Federal Reserve, calling for a more stimulative policy than preferred by Chairman Alan Greenspan.
The Dow Jones News Wire contributed to this report.
