ABA Won't Have System For Lobbying Retooled In Time for Reform Vote

The American Bankers Association will not complete the overhaul of its grassroots lobbying operation in time to affect this year's debate on financial reform.

ABA president R. Scott Jones, who called for the fix after the group was outlobbied by the credit union industry last year, said the new system will be presented to the board in July, making it unlikely that it could be fully implemented before Congress wraps up its work for 1999.

Mr. Jones said it was never was his goal to adopt a formal grassroots plan in time for the current session of Congress.

"We really do have a sound grassroots infrastructure in place today," he said. "It would be misleading to say that our grassroots effort was not effective."

The plan, still in development, calls for the ABA and state banking groups to pick one industry official per state to pressure fellow bankers to maintain regular contact with their lawmakers.

Also, the ABA plans to improve its own methods of providing legislative information to members, and to maintain a data base of bankers knowledgeable on specific topics.

"We just need to do a better job," said James E. Smith, president of Union State Bank and Trust in Clinton, Mo., and head of the ABA's grassroots task force. "If we don't do it to help our banks and help our industry, nobody's going to do it for us."

While the ABA works on its plan, the credit unions' grassroots campaign continues. This campaign last year resulted in a law expanding credit union membership eligibility, despite objections from the banking industry.

Last week Consumer Action, a San Francisco organization with ties to the credit union industry, reported that banks receive federal subsidies worth two to five times as much as the benefits credit unions receive by not paying taxes.

The House and Senate banking committees approved financial reform legislation this month.

A particularly thorny issue for banks is whether commercial firms will continue to be allowed to buy thrifts.

Banks want the practice stopped, saying it is a loophole around a ban on mixing banking and commerce.

Karen Shaw Petrou, president of ISD/Shaw Inc., a consulting firm here, said it is better for the ABA to make substantive changes to its grassroots efforts than to implement a quick fix.

"They learned something from the credit union debate, and they're trying to address it, which is not easy to do quickly," she said. "It would be nice to have that infrastructure now, but that doesn't undermine the fact that they'll have another important vote next year."

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