In January 1993, the Independent Bankers Association of America asked the government to decide whether a feature of its mortgage banking program met the standards of the Real Estate Settlement Procedures Act, or RESPA.
The issue seemed simple enough. Participating banks prepared mortgage applications for customers and received a small fee from the trade group's mortgage banking firm, PHH US Mortgage, Cherry Hill, N.J. The question was whether the fee - less than $200 for the smallest banks - was a reasonable payment for services rendered or an illegal kickback.
Two years later, the trade group is still waiting for an answer.
In the eyes of its leaders, the situation is typical of a government agency that is either unwilling or unable to decide an issue important to a business interest.
Lawyers here who deal with Department of Housing and Urban Development HUD say there's nothing unusual about the agency's slow response.
"We turn down HUD work," said one lawyer-lobbyist. "It's just a mess."
For its part, HUD said it had decided early on to develop a general rules for all mortgage lenders, rather than to deal specifically with the IBAA case. Having said that, agency officials don't deny that two years is out of line.
"Do I wish we had more resources?" asked one HUD official, who was speaking for the department. "Absolutely.
"Can I tell you truthfully that we are the best regulator in town? I can't."
However, this official said, when Democrats came into office two years ago, they found themselves saddled with a cumbersome rulemaking process and were faced with the need to interpret complex rules.
Nicolas P. Retsinas, assistant secretary for housing, did deliver a letter to the IBAA during its convention in Honolulu that agency officials said should give the group sufficient guidance to run its program. That letter has been passed on to the IBAA's lawyers, who haven't yet decided what it means.
"Their letter just raised a whole host of questions," said Diane Casey, the IBAA's executive director.
Nobody denies that a legitimate issue is involved. Under the law, HUD is obliged to ensure that banks are not steering customers to high-priced mortgage brokers because of the size of the referral fee paid.
But the IBAA, which argues that its fees are reasonable, is questioning the time HUD is taking to decide the issue.
HUD says the IBAA is asking too much.
"We have 80 to 100 businesses a week that call HUD and ask if one program or another will meet the statute," the HUD official said. "We don't have the resources to do that."
Moreover, the official said, it isn't HUD's job to guide individual business organizations. "I'm sure everyone would like to be able to call the U.S. prosecutor and say, 'If I do this, will you be able to convict me for fraud?' "
But the IBAA argues that HUD, by delaying decisions on its program, is hindering a basic government objective of providing housing for low- and moderate-income Americans. The program involves federally guaranteed loans, and the average mortgage is $75,000.
"That's not a lot of money in any part of the country," said the IBAA's Ms. Casey.
Ms. Casey believes that HUD's slow pace demonstrates a bias within the agency against rural America - a charge HUD denies.
"They operate from the standpoint of urban America," she said. "They just don't understand rural communities."
The IBAA has raised the ante this year, first appealing over the heads of RESPA officials to HUD Secretary Henry G. Cisneros and then to President Clinton.
With the presidential campaign season already underway, the trade group is hoping for a return of the "new Democrat" that Bill Clinton campaigned as in 1992.
