Rejecting a key lawmaker's request, Treasury Secretary Robert E. Rubin said last week the Clinton administration will not ask regulators to delay decisions on new bank powers.
Mr. Rubin, in a Dec. 30 letter to House Rules Committee Chairman Gerald Solomon, said he is forbidden from influencing individual issues pending at the two banking agencies the Treasury oversees.
"Congress has prohibited the Secretary of the Treasury from intervening in any particular matter or proceeding before the Office of the Comptroller of the Currency and the Office of Thrift Supervision," he wrote in a Dec. 30 letter to Rep. Solomon. "Executive branch agencies have a separate responsibility to apply the law and to address the issues that come before them."
Rep. Solomon, in Dec. 10 letters to Mr. Rubin and John L. Hilley, President Clinton's director for legislative affairs, warned that efforts to pass financial reform legislation would be harmed if regulators approved pending requests to let banks enter new businesses and to let large financial firms establish thrifts.
But Mr. Rubin countered that regulators' decisions, such as the Dec. 11 ruling allowing Zions National Bank to underwrite municipal revenue bonds from an operating subsidiary, may push Congress to act. "Experience has shown that if government is not responsive to (economic) realities, the market will find its own way of circumventing outmoded laws and restrictive regulations to meet the needs of consumers."