Sen. Paul S. Sarbanes continued Democrats' staunch defense of the Community Reinvestment Act last week.
He and fellow party members object to the financial reform bill the Senate Banking Committee approved March 4 because they say it is a rollback of the CRA. It would exempt small banks from community reinvestment requirements and would shield banks from community group protests when they seek to merge with insurance or securities companies.
The CRA "is a simple law that says very simply that banks must make creditworthy loans in the communities from which they take deposits," Sen. Sarbanes told a National League of Cities conference here. "But this simple law has made $1.05 trillion of credit available to low- and moderate-income homebuyers and small businesses."
The Maryland Democrat said lawmakers must fortify the CRA, because the merger frenzy will swallow community banks and local credit will dry up.
"If we allow financial modernization to take place without continuing to require an effective CRA commitment, we will face the very real possibility that capital will once again fly out of cities, and the recent advances we have made will quickly reverse."
The House Banking Committee's chances of adopting bipartisan financial reform legislation looked bleak late Wednesday after Rep. John J. LaFalce slammed his hand on the table during a procedural quarrel with Republicans.
"Absolutely not," the committee's ranking Democrat thundered after Republicans tried to override a controversial Democratic amendment that would have required Federal Reserve Board hearings on megamergers.
"If this goes forward, the bipartisanship we have had will come to an end (and) the chances of Congress passing this bill will come to an end," he said.
But by Thursday night the parties had smoothed over differences and Rep. LaFalce and House Banking Chairman Jim Leach were praising each other.
"Ninety-nine percent of the time, all of us kept our cool," Rep. LaFalce said after the committee approved the bill 51 to 8. "There may have been an exception or two," he said, prompting laughter from the audience.
Longtime observers were not surprised by the twists and turns that ultimately led to overwhelming bipartisan approval. "The House Banking Committee always takes the scenic route," said Karen Shaw Petrou, president of the ISD/Shaw consulting firm here.
Bobbie Jean Norris, the Federal Deposit Insurance Corp.'s community affairs coordinator, is jumping ship March 29 to join the National Credit Union Administration.
A seven-year FDIC veteran who has also worked at the Farm Credit Administration, the former Federal Savings and Loan Insurance Corp., and the Comptroller's Office, Ms. Norris will oversee examination quality, applications, and problem credit unions for the NCUA's six-state Middle Atlantic region.
It's only rock 'n' roll, but William Poole likes it. The president of the Federal Reserve Bank of St. Louis was swinging to the Rolling Stones on Monday at the MCI Center in Washington. Tuesday morning, the monetary economist quipped that he should have brought earplugs.
Comptroller of the Currency John D. Hawke Jr. appointed Jeanne K. Engel as the agency's first deputy comptroller for community affairs.
Ms. Engel will advise OCC officials on community relations programs and minority and urban affairs. She has been an independent consultant in the housing and community development industry since 1995. She previously worked for the Department of Housing and Urban Development and the Federal Housing Administration.
