The Lobbyists: Rules Chief Blocks Glass-Steagall Vote

Glass-Steagall repeal legislation was a hair's-breadth away from being brought up on the House floor last week.

House Rules Committee member David Dreier, in a July 26 memo to House Majority Leader Richard Armey, R-Tex., recommended bringing the bill up early last week under a suspension of House rules.

Rep. Armey almost went for it, according to an industry source.

"Armey was very close to bringing up the Glass-Steagall bill under Dreier's plan," he said.

Rep. Dreier, R-Calif., also recommended coupling two controversial insurance-related measures currently in the regulatory relief legislation for a single up-down vote as an amendment to Glass-Steagall.

One provision, which banks oppose, would freeze national bank insurance powers, while the other, which most banks support, would allow banks and insurance companies to affiliate in most states.

"Armey thinks that Glass-Steagall is not very controversial, and philosophically he's very close to the Baker approach," said the industry source.

Rep. Armey reportedly changed his mind after receiving a strongly worded memo from House Rules Chairman Gerald Solomon, R-N.Y., calling Rep. Dreier's plan a "totally unacceptable approach."

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The "Baker amendment" was a point of contention at a recent meeting of the American Bankers Association's legislative liaison advisory committee.

The group, called simply "Lilac," met last Wednesday to discuss the issues surrounding a thrift insurance fund rescue, but talk quickly turned to the bank-insurance affiliations issue.

The Independent Bankers Association of America has so riled small banks about the Baker amendment that they are pressing the ABA to reverse its position, said one observer.

The community bank group says that allowing banks to affiliate with insurance companies would lead to huge financial conglomerations.

But if the ABA does a U-turn, larger banks would be upset.

"It puts ABA in a hell of a spot," said the observer. "ABA is trying to serve two masters."

ABA director of legislative affairs Floyd Stoner, who conducted last week's meeting, said discord simply can't be helped.

"Affiliations is a complex issue, and we represent a big diverse industry, so you're going to get some differences of opinion," Mr. Stoner said. "We're going to forge a consensus."

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Senate Banking Committee Chairman Alfonse M. D'Amato's Whitewater workload forced him to cancel a Friday meeting with banking industry representatives about rescuing the thrift insurance fund.

The New York Republican had planned to meet with representatives of the American Bankers Association, the New York State Bankers Association, and the Bankers Roundtable.

Chief ABA lobbyist Edward L. Yingling said Sen. D'Amato simply wanted to "sit down and talk with everybody," adding that the senator and the bank groups will reschedule as soon as possible.

While rumors were swirling last week about a possible vote in Senate Banking on a thrift fund rescue bill, a number of sources said that the odds now seem to favor a markup after Congress returns from its August recess.

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Laramie Faith McNamara resigned last month as the head of Bank of America's Washington lobbying shop.

Ms. McNamara, who officially parted ways with BofA on July 15, had been absent since early this year.

The San Francisco-based giant said that Ms. McNamara left for health reasons. Ms. McNamara repeatedly hung up on an American Banker reporter seeking comment last week. Calls to Rex Wackerle, BofA's vice president of federal and international relations here, were not returned.

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