House Banking Committee Chairman Jim Leach admits he was tempted to torpedo the sweeping financial reform plan his committee approved last week.
If he had voted no instead of yes, the 28-26 tally in favor of the bill would have become a 27-27 tie, killing the package. "I have to acknowledge that I considered it," the Iowa Republican said in an interview Monday.
But a no vote, Rep. Leach said, would have destroyed his influence over industry reform.
"It would have weakened whatever role I might have in the future," he said. "It would have been counterproductive."
Besides, voting against the bill would have been "unfair" to committee members, who worked for months to craft a plan that could pass, Rep. Leach said.
Still, he maintains his opposition to any mixing of banking and commerce, and plans to fight for changes on the House floor.
Though he expected the committee to permit banks to buy nonfinancial businesses, Rep. Leach said he was surprised members agreed to let commercial firms acquire banks.
"I knew it would be close, but I thought it would be close the other way," he said.
In another close call, the committee voted 25-23 to let commercial firms earn up to 15% of their revenues from banking. While he voted against this amendment, Rep. Leach said many Republicans on the committee voted for it because they mistakenly believed it was part of a compromise allowing banks to derive up to 15% of their revenues from nonfinancial business.
Rep. Leach would not say how he plans to vote if he fails in his attempt to strip the bill of provisions allowing banks and nonfinancial firms to merge when it hits the House floor.
"I reserve judgment," he said. "I want to be in as strong a negotiating position as I can."
The legislation, approved June 20, also would allow banks, securities, and insurance firms to own each other-a goal Rep. Leach wholeheartedly supports.
"There's a lot in this bill for the public interest," he said.
But before the bill reaches the floor, it must get through the Commerce Committee, a panel Rep. Leach said would give "strong review" to the bill's insurance and securities provisions.
Still, Rep. Leach predicted Commerce would not make "radical" changes at the banking industry's expense. "If you ride roughshod over any industry you get into grave difficulty," he noted.
The bill already takes care of many insurance industry concerns, he said. For example, it would rein in the Comptroller of the Currency's authority to grant new powers to national banks. Despite banking industry opposition, the provision is politically necessary, Rep. Leach said.
"I have believed all along that one had to take the insurance industry's perspective into consideration, otherwise there could be no bill," he said.
To win the bill's 10 Democratic votes, Rep. Leach also had to accept pro-consumer measures. No bill can clear the House without bipartisan support, he said.
"This is a reflection of democratic lawmaking," Rep. Leach said. "To come up with the balance that is in the public interest is very difficult."
Rep. Leach dismissed the banking industry's loud protests over the insurance provisions and other parts of the bill. "All the groups are focusing on what's wrong and rather few are emphasizing there's something they like," he said. "No one wants to say they're satisfied-that implies that's all they can get."
Though many industry sources predicted that last week's close vote would doom the measure, Rep. Leach insisted a majority of House members want to see the legislation enacted.
Besides, Rep. Leach said he could have gotten more votes in committee if needed. A handful of lawmakers who voted "no" to signal opposition to specific provisions were willing to change their ballots, he said.
"I firmly believe that if we had pressed, several Republicans would have reconsidered their opposition if their votes were needed," he said.
