Capitol Account: Free-Market Fan May Be Big Ally for the Industry

Credit unions weren't happy when Sen. Robert Bennett pushed through an amendment requiring a study of their industry. And when credit unions are unhappy, legislators usually do whatever it takes to cheer them up.

Not Sen. Bennett. The Utah Republican considered his amendment reasonable and he went full steam ahead, never mind what the politically powerful credit union industry thought.

"The question is, do credit unions occupy a niche in the market that nobody else does?" he asked rhetorically. "And can they fill it better than anyone else?

"They say they do," he added. "I'm not prepared to argue with that, but I am not prepared to automatically accept that just because it was true for the last 60 years, it will continue to be true for the next 10 years."

The 62-year-old legislator is hardly a wild-eyed revolutionary. But in his three years of Senate service, he has shown a willingness to take on powerful interests on issues both large and small, when he thinks he's right.

And that could prove to be a blessing for bankers, since his free-market perspective appears to favor the industry's point of view more often than not.

Tall and lanky, Sen. Bennett has an easy smile and a gentle, self- deprecating sense of humor. "There," he said, after answering a question during an interview this week, "was that wishy-washy enough?"

Like Jake Garn, his onetime public school classmate and his predecessor in the Senate and on the banking committee, he is a free-market conservative. He wears a pin with the numerals 2002, the year he is determined that the federal budget will finally come into balance.

In the interview, the Senate Banking Committee member cited the pending regulatory relief bill as his No. 1 legislative priority in the banking area. As it happens, that package is also the banking industry's top priority.

No. 2, he said, is the pending bill to repeal Glass-Steagall. But while Sen. Bennett clearly favors additional steps to modernize the financial services industry, he's in no rush to get there.

Indeed, he said, financial modernization may be one of those big issues, like health care, that Congress should take its time with.

"One of the things that has bemused me a little bit about Washington is the assumption that this Congress" - i.e., this two-year legislative session - "somehow has to solve every problem before it, and if we don't the world will come to an end," Sen. Bennett said.

"The changes that are occurring in financial services are fundamental," he said. "So I don't feel a need to come up with a solution for the 21st century in this Congress.

"It may be that just dealing with Glass-Steagall is the logical thing to do in this Congress, and leave the fundamentals of restructuring everything for some future time," he added.

But Sen. Bennett also noted that the outlook for Glass-Steagall isn't all that rosy.

"As weird as it sounds, we're starting to run out of time," he said. This current session is all but over, and Congress is expected to begin work late next year and end early to permit members time for campaigning back home.

"So if we're late on the front end and want to leave early on back end, it's a perfect circumstance for someone to say, 'Let's put off the heavy lifting,'" he added.

The son of former Sen. Wallace Bennett and a lobbyist for the Department of Transportation during the Nixon administration, Sen. Bennett said the workings of Congress held few surprises for him when he arrived in 1993. But he has been frustrated by congressional life, as was his predecessor, Sen. Garn.

What he finds most frustrating is "the lack of understanding of the way the marketplace really works" and the uncritical willingness of lawmakers to accept forecasts of revenues and expenditures seven years in the future.

"I have not reached Jake's level of frustration - yet," he said. "I guess when I do, I'll quit the way he did."

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER