WASHINGTON — It may already be time to reconsider expectations that a Bush presidency would be good news for bankers.

At least that’s what one longtime Washington insider says.

With ballots still being counted in Florida and Democrats vowing to contest alleged voting irregularities in court, Independent Community Bankers of America executive vice president Kenneth A. Guenther warned that a divided electorate and narrowed GOP majorities in the House and Senate could diminish George W. Bush’s authority if he wins.

Furthermore, Mr. Guenther said, though Texas Gov. Bush would be expected to fight to repeal the estate tax, to enact other pro-bank tax breaks, and to ease regulatory burden facing financial institutions, he also would likely weaken some critical federal programs.

Mr. Guenther — a 64-year-old registered Republican and former Nixon appointee — argued that on balance a final tally showing Vice President Gore as the victor might not be all bad.

“Community banks depend on government programs, starting with federal deposit insurance, government-sponsored enterprises, and an active Federal Reserve Board role in payment systems,” said Mr. Guenther, who has been active in banking issues since 1969. “A Gore presidency is more likely to preserve those essential government programs. A Bush presidency is more likely to review those programs critically.”

Mr. Guenther pointed to Republicans in the House, such as Rep. Richard Baker, R-La., who has sought to limit the powers of GSEs such as Fannie Mae and Freddie Mac.

He also predicted that deposit insurance reform, including a proposal to double coverage to $200,000 per account, would likely not move forward under a Bush administration. Several key opponents expected to have sway with Mr. Bush, including Senate Banking Committee Chairman Phil Gramm and Federal Reserve Board Chairman Alan Greenspan, have already criticized suggestions for a higher coverage limit. Mr. Guenther said the chances of reform would also be hurt by the loss of Federal Deposit Insurance Corp. Chairman Donna Tanoue, who would be replaced by a Republican administration.

On the flip side, Mr. Guenther said banks could be hurt by a Gore administration that would likely push more privacy provisions or stronger Community Reinvestment Act regulations.

But no matter who wins the White House, Mr. Guenther said that not much legislation is likely to get past a deadlocked Senate, where Republicans have been reduced to a one-seat majority after Tuesday’s elections. If GOP incumbent Sen. Slade Gorton loses his Washington race — where the vote count is expected to continue for days — the Senate could end up divided 50-50.

“The split means core Republican issues will be blocked by the Democrats. Meanwhile, core Democratic issues will be blocked by the Republicans,” Mr. Guenther said. “The Senate is going to find it very, very difficult to function. They will almost immediately have another two years of campaigning to try to better define who is in charge and who is running the Congress.”

In the Senate Banking Committee, Sen. Gramm will remain in control, but his party is expected to hold a thinner majority, perhaps just one seat. That could play a crucial role when it comes to new privacy legislation, Mr. Guenther said, because privacy hawk Sen. Richard Shelby is likely to vote with Democrats on that issue.

“It will be harder for Sen. Gramm to maintain control of the committee on issues where he doesn’t have total Republican support,” Mr. Guenther said. “Privacy is one of those issues.”

Any proposal from Sen. Gramm to limit CRA rules would also face a tough fight, as Democrats will have more power to block any weakening of those provisions, Mr. Guenther said.

The key decisions will be made where Sen. Gramm and Sen. Paul Sarbanes of Maryland, the Democratic ranking member on the committee, find common ground, Mr. Guenther said.

Mr. Guenther said he does not expect the dynamics to change much in the House, as the Republicans retained most of their majority.

The silver lining for bankers is that the industry is not seeking financial reform or other major legislation.“The dynamics are in a way favorable,” he said. “Nothing has to be done in a major way to allow banks, thrifts, and credit unions to go forward and do their business. The bottom line is that we will not be dealing with major cosmic banking issues.

This gives the President and Congress more leeway to sit back and see how things develop. We haven’t had that luxury in 20 years.”

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