WASHINGTON - After taking it on the chin for so many years, banking lobbyists are ready to begin punching back.

They see the first "honeymoon" months of the Clinton administration as a golden opportunity to push an agenda that includes regulatory relief and interstate branching - issues on which the President-elect himself has been supportive.

But bankers' opponents will be ready, too, pushing proposals to beef up the Community Reinvestment Act, to which Bill Clinton also has been sympathetic.

For most of the industry, the primary aim is to ease the tough new requirements of the Federal Deposit Insurance Corporation Improvement Act of 1991.

Big regional companies are focused on interstate branching rights, which would allow them to consolidate their multiple charters.

President-elect Clinton "is saying that all of American business - not just banks - is not as competitive as it could be because of paperwork and regulatory burden," said Joseph Belew, president of the Consumer Bankers Association.

As a result, he said, regulatory relief could become an enduring theme of the Clinton administration.

On the other side, antipoverty groups such as the Association of Community Organizations for Reform Now believe Mr. Clinton will support initiatives they are recommending that would saddle banks with added regulation.

Something for Everyone?

Given Mr. Clinton's history, he may find ways to please and disappoint both sides.

Politically he has long been "close to the main Arkansas banks," said Deepak Bhargava, legislative director for the Association of Community Organizations for Reform Now. "But when it comes to issues like the Community Reinvestment Act, he has always been close to our position."

While Mr. Clinton has spoken repeatedly of the need to remove obstacles to bank lending, he has also stressed the importance of the CRA and even - albeit early in his campaign - called for limits on bank credit card rates.

In Economic Context

As a result, the industry is casting its arguments - both on interstate branching and regulatory relief - in the context of the economy, hoping that the promise of jobs and growth will tip the balance in their favor.

It is assumed that Mr. Clinton will ask Congress to act on an economic stimulus package within his first 100 days, and bankers are hopeful that he will tackle bank regulation in that bill.

Among the measures they hope he will address: CRA paperwork requirements, operational standards mandated in the 1991 banking law, and new auditing standards that require accountants to assess a bank's compliance with safety and soundness standards.

Bankers are also counting on support from key lawmakers.

Neal a Key Ally

On interstate, the regionals have a strong ally in Rep. Stephen L. Neal, D-N.C., the likely next chairman of the House Banking subcommittee on financial institutions.

They are further encouraged by Rep. Neal's decision to hire Paul Nelson, the longtime staff director of the House Banking Committee, as his top aide.

Mr. Nelson's parliamentary and political skills are legend and he has told regional bank lobbyists - who had begun talking about a more limited approach to interstate branching - that they should raise their ambitions.

Rep. Neal also sides with the industry on regulatory relief, and his subcommittee will be the starting point for most of the legislation that affects banks directly.

Climate Still Uncertain

But for all the industry's new-found confidence, the legislative climate remains uncertain. Barriers that have blocked bankers' initiatives in the past remain in place, and new ones have cropped up.

Interstate, for example, could well fall victim to the ambitions of insurance agents, who used a branching bill in 1991 as a vehicle to limit bank insurance powers. In the end, they failed - but so did the interstate bill.

Recognizing the power of the insurance lobby, superregional companies led by NationsBank Corp. and Fleet Financial Group worked out a compromise earlier this year that would have linked interstate branching to limits on bank insurance powers.

Sign of Rising Optimism

That deal drew strong opposition from other factions and never received serious consideration. But in a sign of the regional bankers' rising optimism, they have said the deal with the insurance lobby is off.

The insurance agents have no intention of letting down their guard.

"We are not going to go away," said Robert Rusbuldt, a lobbyist for the Independent Insurance Agents of America. The regionals, he said, "have to decide if they want to go in united or if they want to fight us."

Other legislative interests could hobble an interstate bill. Rep. John D. Dingell, D-Mich. the powerful chairman of the House Energy and Commerce Committee, may try - as he did in 1991 - to use an interstate bill to push through restrictions on bank insurance powers.

Even if he fails to gain jurisdiction in the House, key members of the Senate, including the ranking Republican on banking committee - Sen. Alfonse M. D'Amato of New York - share his views on limiting banks' securities and insurance powers.

Chairmen Skeptical

Likewise, meaningful regulatory relief is far from certain. The chairmen of the House and Senate banking committees have made it clear they view the industry's arguments as little more than a plea for special treatment that poses a threat to the insurance fund.

"We must be cautious about removing the seat belts and allowing the car to run headlong into the intersection," said Rep. Henry B. Gonzalez, D-Tex., chairman of the house panel.

To top it off, the November elections set the industry back. A number of key banking allies on the House committee are leaving Congress and have been replaced, by and large, by urban liberals who may believe the industry needs more, not less, regulation.

In the Senate, the senior banking committee Republican, Jake Garn of Utah, is retiring and yielding his role to Sen. D'Amato, a staunch securities industry ally and the sponsor in 1991 of legislation that would have capped credit card rates.

Clinton the Key Unknown

The key unknown next year is the new President.

Bill Clinton clearly believes that increased bank lending is vital to his economic program. But nobody knows for sure what tack he will take on banking legislation or how much political capital he is willing to expend on the industry's behalf

Bankers are counting heavily on personal ties to the Arkansas Democrat. The president of the American Bankers Association, William Brandon, is an Arkansas banker. The trade group's chief lobbyist, Edward L. Yingling, has longstanding ties to Arkansas political establishment.

Some bankers, notably Fleet Financial Group chairman Terrence Murray, were early Clinton supporters.

Risky, Messy Business

But even if they have persuaded the President-elect of the merits of regulatory relief or interstate branching, it is far from clear that he will want to risk a messy legislative battle that could threaten other programs that are more important to him.

Still, bankers are heartened by his frequent comments - including those during the recent economic conference in Little Rock - about the need to ease restraints on bank lending. It is assumed within the industry that he is ready to take on the "regulatory burden."

"There are clearly indications that the message we have been working on is getting through," said Mr. Yingling of the ABA.

A number of other issues important to bankers are likely to receive early attention, among them bankruptcy reform and tax-code changes. An industry-supported bankruptcy bill came close to passing last year, and is expected to move through to the President's desk early in 1993.

That bill would make make it more difficult for borrowers to use bankruptcy proceedings to avoid repaying debts.

Likewise, a tax bill vetoed by President Bush is expected to receive early attention. That bill would make it easier for banks to convert trust accounts to mutual funds and would permit institutions to amortize intangibles, such as core deposits acquired in assisted mergers.

One Regulatory Agency?

One sleeper is a bill that would consolidate the bank regulatory agencies into one. The Senate Banking Committee chairman, Donald W. Riegle, D-Mich., considers it a top priority and has staff working on it.

"It's still a hard bill to do, but there is support for it" on Capitol Hill, said Karen Shaw, president of the Institute for Strategy Development in Washington.

An unknown that will affect the outlook for banking legislation is the fate of an expected funding measure for the Resolution Trust Corp., which has been essentially broke since April 1.

Two years ago, the battle over RTC funding soured an entire class of freshman banking committee members, most of whom supported funding at the committee level only to see their colleagues reject it on the floor. Next year's battle could be equally nasty.

"There is no incentive for any Republican or any freshman member to vote for RTC funding," said Rep. Jim Leach of Iowa, the new ranking Republican member of the House Banking Committee.

Early Strike on RTC

Many Democrats, including Mr. Nelson, the future subcommittee staff director, believe the Clinton administration should strike early on RTC funding.

Their reasoning is that Democrats can blame the savings and loan mess on 12 years of Republican rule and use the funding measure as evidence that they are ready for the tough business of governing.

But if the battle turns nasty, as many expect, it could sour the young administration and many new lawmakers on banking legislation. If so, the next Congress could end up looking pretty much like the last two, and the banking industry, which is beginning the year with such high legislative hopes, could end up on the defensive again.

Where the Legislative

Odds Are Short

Community developmentbanks Shoo-inRegulatory Evenrelief moneyAdded Evenregulations money

Expanded

IRAs 3 to 2

Bankruptcy reform 2 to 1

Interstate banking 5 to 2

The Early Line on 1993 Banking Legislation

Community development banks

As Arkansas governor, Bill Clinton helped start a

development bank in rural Arkansas and talked up the idea

in his campaign. In one form or another, he'll get it. Sure thing

Regulatory relief

Bankers appear to have convinced the president-elect that regulations hurt

lending, but they still have to make their case to skeptical lawmakers. If

the new president includes some relief in his economic

package, it could get quick and favorable consideration. Even money

Regulatory burden

Despite the deregulation prospects, consumer activists who have waited 12

years for a Democratic president will insist on action against loan

discrimination and credit scams, and in favor of low-cost

banking services for the poor. They won't get everything, but

they won't be completely disappointed. Even money

Expanded IRAs

Sen. Lloyd Bentsen, moving to the executive branch as Treasury

secretary, was the chief Capitol Hill advocate of broader

eligibility for tax-deferred retirement accounts. Need we

say more? 3 to 2

Bankruptcy reform

A bill came with a whisker of passing last year and could

make it to President Clinton's desk early in 1993. 2 to 1

Interstate branching

Best chance in years, but unlikely to pass unless controversial

bank insurance powers and community reinvestment issues

are addressed. Expect a close fight. 5 to 2

Glass-Steagall repeal

Life wouldn't be the same without the Glass-Steagall Act,

which will pass its 60th anniversary next year. Expect it to

last until the 61st. 30 to 1

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