Commerce Committee to work out a compromise on insurance issues in the Glass-Steagall repeal legislation fell through. Representatives from the banking and insurance industries, as well as of the House Banking Committee, had been invited to meet with Robert Gordon, a staff member of the commerce panel, to discuss the outlines of a possible compromise. But that Monday meeting was canceled at the last minute, reportedly because of uncertainty on whether House Banking Committee Chairman Jim Leach, R-Iowa, would support an insurance amendment to his repeal bill, which soon will be taken up by the commerce committee. "There are a bunch of rumors going around as to what Leach wants to see done, and that confusion led to the postponement," said a House aide who has worked on the bill. "If we come to some agreement but he's against it, then it doesn't look so good." One source said the meeting might still be held Thursday. Philip Corwin, an American Bankers Association lobbyist, said those invited to the meeting were sent an outline of issues that looked much like an amendment Rep. Richard Baker, R-La., had planned to offer during House Banking Committee deliberations on the Glass-Steagall legislation last week. The measure would have allowed banks and insurance companies to affiliate but would have placed a moratorium on the Comptroller of the Currency's letting banks sell new insurance products. Rep. Baker withdrew the amendment, citing a lack of agreement between banking and insurance industry representatives on the measure. "There are elements of the outline we like, and elements we don't like," Mr. Corwin said. "But if anything gets agreed to, it will probably be the night before the commerce committee votes on it." However, another bank lobbyist said the canceled meeting was a step backward in negotiations between the insurance and banking industries. "This was like arguing about whether the table should be round or square," he said Monday. "Based on today's cancellation, I think what the commerce committee will do with the whole insurance question is a wild card." A commerce committee spokesman was unavailable for comment. About 700 members of the Independent Insurance Agents of America are descending upon Capitol Hill this week for the group's legislative conference. They brought a three-part message to lawmakers, according to James R. Klagholz, chairman of the group's government affairs committee. "National banks should not be allowed in the insurance business, . . . banks must follow the same regulatory climate . . . that agents work with on a daily basis, and the Comptroller should not be permitted to contravene congressional action and intent," Mr. Klagholz said. Paul Equale, the organization's senior vice president for government affairs, charged that the Comptroller's decision to let national banks sell certain insurance products went too far. "The banks don't really need their lobbyists if they have the Comptroller," Mr. Equale said.
*** Some eyebrows were raised when the ABA treated about 40 congressional staff employees to two days at the luxurious Homestead resort on the weekend before the House Banking Committee took up Glass-Steagall repeal. While some sources questioned the proximity of the event to the Glass- Steagall vote, Edward L. Yingling, chief lobbyist for the ABA, said the timing was "purely coincidental." "We have a congressional staff retreat every spring," Mr. Yingling said. "We invite House and Senate staff, both Republican and Democrat, so we weren't targeting the House Banking Committee." Some of the topics discussed at the Homestead, where single rooms start at around $218 per night, included the health of the bank and thrift industries, the looming disparity between bank and thrift insurance premiums, and Glass-Steagall. One staffer who attended described the weekend as a "work trip." "That very weekend the ABA was involved in negotiations with a lot of the staff on Glass-Steagall issues, so there was a legitimate purpose," he said. "If we weren't doing that out there, we'd be doing it on the Hill."
