WASHINGTON -- The banking industry turned its attention to the White House at the end of last week, wondering if President Bush would sign a housing bill that offers some regulatory relief.
Key Legislation Dies
The housing authorization measure, which also includes a major package on money laundering, was virtually all that remained of the industry's legislative agenda for 1992. Congress is expected to send it to the White House in the next two weeks, and a veto is not expected.
A bankruptcy reform bill -- the top legislative priority of the American Bankers Association -- died in the closing minutes of the legislative year as the House abruptly adjourned without taking action on any of the dozens of measures still on its agenda.
And it appeared that President Bush would veto a tax measure strongly supported by the banking industry. The bill, which would have permitted bankers to depreciate intangible assets such as goodwill acquired in mergers, contains several revenue raisers and is expected to fall victim to the "no new taxes" pledges.
On the plus side, Congress passed a minor bill permitting bank agencies to suspend some regulations in disaster areas.
Swaps Measure Advances
And the Senate forwarded to the President a measure clarifying the authority of commodities regulators to permit swaps to trade outside established exchanges. Big banks had worried that without the legislation, a court might conclude that any of the $150 billion in outstanding swap contracts are unenforceable.
Banking lobbyists were pleased to get anything from Congress this year, particularly after the drubbing the industry took in 1991.
"The problem in an election year is getting anything done," said Edward L. Yingling, chief lobbyist of the ABA. "We always knew that the bankruptcy bill was a long shot, but it was still a disappointment" to lose in the final minutes.
But the progress made on the bill this year, he said, puts the industry in a good position for next year. And the regulatory relief package in the housing bill while modest, may provide a jump start for next year.
The housing bill would give banks an additional 90 days to get ready for the truth-in-savings legislation, and the law's disclosure requirements would not apply to signs in the lobby.
More important to many bank officers, the bill toned down a provision requiring regulators to issue guidelines for executive compensation. Now guidelines need be issued only to cover unsound institutions.
Thrifts are given more time to phase out investments in real estate development units, and the law makes clear that regulators have authority to exempt smaller mortgages from appraisal requirements.
Appraisers wanted regulators to mandate their services on all mortgage loans and were fighting in court against the exemption for loans under $100,000.
"Bankers are having a difficult time getting appraisals," said Mr. Yingling. "If we had to go to court and lost, we would have had major problems."
The money-laundering measure, which was added by Rep. Frank Annunzio, D-Ill., pulled together measures that have been debated and passed in different form for years.
The package would require regulators to close institutions if top management was found to have been involved in laundering illicit money, and it would regulate nonbank "money transmitters."
It would create a "safe harbor" to protect financial institutions that have provide information to law enforcement authorities about customers. In the past, banks have been sued for mistakes, even when they were acting at the behest of authorities
The bill also mandates record keeping for international wire transfers, but gives the Federal Reserve a role, along with Treasury, in deciding what kinds of records need to be kept.
"We've always felt the Federal Reserve has a better understanding [than Treasury] of the wire system, and won't promulgate rules that would be unworkable," said John Byrnes, an ABA lobbyist.
The money-laundering bill also gives states access to currency transaction reports filed with the Internal Revenue Service. Bankers are hopeful that the new authority will persuade states to drop requirements for joint reporting.
The collapse of the bankruptcy bill came a a particularly bitter disappointment to bank lobbyists. The bill had broad support and was 20 minutes from floor action on Oct. 5, when Sen. Alfonse M. D'Amato, R-N.Y., began a 15-hour fillibuster on an unrelated measure.
Once it became clear that the Senate was tied up, the House recessed the next day. Although the House was back in session Thursday and Friday for a few minutes each day, most members did not return.
As a result, roll-call votes were not possible and measures sent over from the Senate had to pass by unanimous consent, effectively giving any House member a veto.
Money-Center Campaign Fizzles
In the end, the House leadership did not even try to bring up legislation Friday and moved for adjournment.
A handful of money-center institutions were mounting a campaign against the measure, which they had concluded would hurt the debtor-in-possession lending business. But its was not clear whether they had lined up a legislator willing to block the package.
"It was like getting a kickoff in the end zone, moving the ball all the way down field, and getting tackled on the one-yard line," said Phil Corwin, an ABA lobbyist.