a shot at transferring a $16 billion obligation to housing giants Fannie Mae and Freddie Mac. House Banking Committee Chairman Jim Leach had listened to their pleas and concluded that they were right: Banks and thrifts should not have to bear the burden of the savings and loan bailout alone. Instead, he decided that the secondary market agencies should shoulder responsibility for the Financing Corp., or Fico, bonds issued in an early effort to rescue the thrift insurance fund. But the grand moment was short-lived. Rep. Leach unveiled his idea on a Friday. By the middle of the next week, it was as dead as a doornail. The episode was an embarrassing setback for Rep. Leach, who gave the appearance of a chairman flailing helplessly in the wind. But the real losers could be the nation's banks - and not just because they're stuck with the largest share of the $16 billion Fico obligation. What really hurts the industry is the perception that it lacked the political muscle to make Rep. Leach's gambit work. Fannie and Freddie rolled into action and within the space of a weekend the two organizations had flattened the banking industry, and with it Rep. Leach. Nobody recognizes that more than Rep. Leach. "I was not surprised by the degree of sophistication of Fannie and Freddie," he said. "What surprised me is the lack of response from the American banking and savings and loan industries." Mr. Leach would not go beyond that statement. But industry lobbyists familiar with the his thinking say he feels let down by banks, whose cause he was trying to support. Edward L. Yingling, chief lobbyist for the American Bankers Association, said it had done what it could in the time available. "We contacted the members of the banking committee and issued a grass roots alert," he said. However, Mr. Yingling added, the trade association had assumed it would have more time to make its case. Instead, the House leadership called an end to the Leach initiative on Tuesday and at that point "our grass roots was not fully engaged," he said. In fairness, Rep. Leach made some mistakes of his own. Fannie is the proverbial 800-pound gorilla, and he should have spent more time enlisting allies, particularly among the ranks of senior GOP committee members. The timing was bad, too. The budget bill, of which the Fico measure is a part, was pretty far down the river for Rep. Leach to be attempting to engineer a change in course. Both his panel and the Senate Banking Committee had already agreed to divide the $16 billion Fico obligation among the bank and thrift industries, and the logistics - not to mention the politics - of rewriting the budget bill were daunting, to say the least. The banking industry didn't get a lot of time to react either. "What were we supposed to do in three days?" complained one exasperated big bank lobbyist. However, there are mistakes, and then there are mistakes. Nobody with voting privileges on the House floor is going to be held accountable for his or her errors, at least not by Washington trade groups. But banks and their representatives on Capitol Hill are always accountable to members of Congress. And Rep. Leach appears none too happy with banks now. "He can go to banks and say, 'I stuck my neck out to support you on Fico and you didn't support me,'" said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America. It would be wrong to paint too dire a picture. Rep. Leach isn't going to turn into Fernand J. St Germain - a past committee chairman that had no use for banks. But a sitting committee chairman is the most important ally a lobbying organization can have. And the next time the banking industry is looking for a champion, Rep. Leach may not feel like sticking his neck out.

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