House Banking Committee Chairman Jim Leach fired off a seven-page, single-spaced statement last week attacking Comptroller of the Currency Eugene A. Ludwig for lobbying against pending financial reform legislation.
The Iowa Republican said Mr. Ludwig is pressing an "unprecedented and unseemly campaign" to mobilize banks against the bill.
Rep. Leach pointed to four critical memos circulated by the Comptroller's Office this summer. The comptroller's arguments are "in more than a few instances inaccurate and, worse, misleading," Rep. Leach said, adding that Mr. Ludwig placed a conference call to American Bankers Association state executives shortly before the trade group voted to oppose the bill two weeks ago.
Rep. Leach said Mr. Ludwig opposes the bill because it would shift some of the agency's power to the Federal Reserve and state insurance officials.
The real issue, Rep. Leach said, is "whether a single unelected bureaucrat should have free reign to interpret and administer a body of outdated law or whether Congress through legislation should establish a modern legal framework for America's financial services industry."
Lee Cross, Mr. Ludwig's spokeswoman, said the first memo had been prepared at the banking panel's request. The agency did not use any of the memos as a lobbying tool, she said.
"All of the points in these memos are included in Gene's testimony" to both the House Banking and Commerce committees. "There is no big secret.
"When Gene gets asked his views on legislative, he gives them. But he does not tell banks what they should do or not do."
Fed Vice Chairman Alice M. Rivlin did what most central bankers consider unthinkable: She testified about the economy without a prepared text.
"She read from yellow pages not cleared by the Fed staff," an incredulous Rep. Leach said at Wednesday's hearing on the economy. Federal Reserve Bank of New York President William J. McDonough quickly added that he, too, was working from notes, although they were typed. Clearly a traditionalist, Fed Governor Laurence H. Meyer read a prepared statement.
Rep. Bill Redmond, R-N.M., became the House Banking Committee's 57th member last week, taking a newly created post on the panel.
Rep. Redmond came to Congress May 20 after winning a special election to replace Democrat Bill Richardson, who was appointed United Nations ambassador.
Because of Mr. Redmond's appointment, Democrats will be allowed to add a member to the committee. They are still searching for a replacement for Rep. Esteban Torres, D-Calif., who joined the committee on a temporary basis in April.
William T. McConnell, chairman and chief executive at Park National Corp., Newark, Ohio, is slated to be the next president of the American Bankers Association.
The industry's biggest trade group will vote in October on a slate of officers nominated this month. R. Scott Jones got the nod as president- elect, putting him in line to lead the ABA in 1998-1999. New to the ABA's 25-member board: Marshall N. Carter, chairman and CEO of State Street Corp. in Boston; Jerry A. Grundhofer, chairman and CEO of Star Banc Corp. in Cincinnati; and R. Eugene Taylor, president of NationsBank's mid-Atlantic banking group in Baltimore.
The National Credit Union Administration's rules are "prejudiced" against institutions that want to change their charters, ABA's chief lobbyist Edward L. Yingling said last week.
In a letter to NCUA Chairman Norman D'Amours, Mr. Yingling complained that federal credit unions must win approval from a majority of eligible members to convert to mutual banks or thrifts. Conversion to a state credit union is much easier, he noted, requiring only a majority of voting members.
"In both cases, the institutions remain mutuals and member-controlled," Mr. Yingling said. "Rules should be applied in a consistent and nondiscriminatory fashion."
Mr. Yingling pointed out that Citizen's Community Federal Credit Union in Altoona, Wis., had failed in its bid to become a mutual savings bank, even though 70% of the ballots and 43% of the full membership had endorsed the switch, while Indiana Members Federal Credit Union was allowed to convert to a state credit union after just 10% of its members approved.
Mr. D'Amours, who was traveling last week, had not seen the letter and would not comment, said NCUA spokesman Robert Loftus. "Our policy is to give recipients time to read letters before we release them to the press," he said.
