WASHINGTON -- The elections have cost the banking industry key allies in both the House and Senate.
On the Senate Banking Committee, two pro-business Democrats lost reelection bids. Moreover, a securities industry ally who won reelection is now in line for the panel's ranking Republican slot.
A Silver Lining
On the House panel, a bloc of moderate Democrats the industry has relied on the past was decimated.
But the House losses may be offset in part by the impending departure of a number of liberal Democrats and the likely elevation of industry ally Stephen L. Neal to chairmanship of the panel's financial institutions subcommittee, which gets first crack at most banking bills.
"I can't tell you how important Steve Neal's win was," said Edward L. Yingling, chief lobbyist for the American Bankers Association.
For the past decade or more, the subcommittee has been led by lawmakers regarded as hostile to the banking industry; most recently, Rep. frank Annunzio, D-Ill., and, before him, Rep. Fernand J. St Germain, D-R.I.
"We've never had anybody there before" who is considered friendly, Mr. Yingling said.
Rep. Neal is a moderate, pro-business Democrat who has championed interstate branching, low-inflation policies, and regulatory relief.
But Mr. Yingling acknowledged that the industry's legislative interests had been damaged considerably by the defeats of other moderate Democrats, including Reps. Elizabeth Patterson of South Carolina and Benjamin Erdreich of Alabama.
Rep. Patterson's defeat in particular could change the committee's dynamics. The three-term lawmaker ranked just ahead of Rep. Joseph Kennedy 2d, the Massachusetts liberal.
Rep. Kennedy has been expected to leave the committee for a promised seat on the tax-writing House Ways and Means Committee. But with Rep. Patterson leaving, he might be in line now for an attractive banking subcommittee.
Wylie's Likely Successor
In addition, the banking panel's ranking Republican, Rep. Chalmers Wylie of Ohio, is stepping down. While Rep. Wylie often supported insurance and real estate interests at the expense of the banking industry, he was a reliable ally in fighting the regulatory burden.
His likely successor, Rep. Jim Leach, R-Iowa, is the panel's leading hawk on capital standards.
All told, at least 10 of the banking committee's 31 Democrats are certain not to return next year, and at least another six are known to be weighing assignments to other committees.
"The complexion of the committee is definitely going to change," said Joseph Belew, president of the Consumer Bankers Association. "It's going to be a more difficult committee, at least to the extent that once again we have to begin the process of outreach and education."
In the Senate, the banking industry was hurt by the primary-election defeat of Sen. Alan Dixon, D-Ill., an influential banking panel member who was part of the Senate leadership. A second blow came Tuesday with the defeat of Sen. Terry Sanford, D-N.C.
"The committee is likely to be more populist, more consumer-oriented," as a result of the elections, said Karen Shaw, president of the Institute for Strategy Development. "The loss of Sanford was a big one, and Dixon's defeat was a major blow."
In addition, most observers assume that the panel's chairman, Donald W. Riegle, D-Mich., will now have one eye fixed firmly on his 1994 reelection campaign. In large part due to his dealings with Charles H. Keating Jr., the now-imprisoned thrift operator, Sen. Riegle is expected to face a tough fight.
The upset victory of Sen. Alfonse M. D'Amato, R-N.Y., was also seen as a blow to banking. But it was a boon to insurance and securities interests that Sen. D'Amato has championed.
"Our highest priority was the reelection of Al D'Amato," said Robert Rusbuldt, lobbyist for Independent Insurance Agents of America, which has helped block interstate banking legislation. "He has been a great friend of the insurance agents." The Casualty List Senate Banking CommitteeAlan Cranston, D-Calif. RETIRED DEFEATEDAlan Dixon, D-Ill. IN PRIMARY DEFEATEDTerry Sanford, D-N.C. TUESDAYTimothy Wirth, D-Col. RETIREDJake Gran, R-Utah RETIRED Likely to leave panelArlen Specter, R-Pa. House Banking CommitteeFrank Annunzio, D-Ill. RETIRED DEFEATEDCarroll Hubbard, D-Ken. IN PRIMARY DEFEATEDMary Rose Oakar, D-Ohio TUESDAYDoug Barnard Jr., D-Ga. RETIRED DEFEATEDBen Erdreich, D-Ala. TUESDAY RAN FORThomas R. Carper, D-Del. GOVERNOR DEFEATEDElizabeth Patterson, D-S.C. TUESDAYCharles Luken, D-Ohio RETIRED DEFEATEDJohn Cox Jr., D-Ill. TUESDAYTed Weiss, D-N.Y. DIEDChalmers Wylie, R-Ohio RETIRED DEFEATEDFrank Riggs, R-Calif. TUESDAY Likely to leave panelEsteban Torres, D-Calif.Gerald Kleczka, D-Wis.Joseph Kennedy 2d, D-Mass.Floyd Flake, D-N.Y.Peter Hoagland, D-Neb.Jim Slattery, D-Kan.Source: American Banker