Senate Banking Committee Chairman Phil Gramm is a reliable quote machine, but the Texas Republican outdid himself last week with a prodigious series of comments on wide-ranging topics.
On freedom: At a hearing Tuesday on granting China more favorable trade relations, Sen. Gramm commented on a passage from Thomas Friedman's The Lexus and the Olive Tree suggesting economic globalization promotes stability and democracy. According to the book, no two countries that have McDonald's franchises have ever gone to war.
Sen. Gramm said, "I'm always a little suspicious of a country's freedom when I go there and they don't have the golden arches."
On election-year politics: The Senate Banking chief blasted the White House on Wednesday for demanding new privacy laws while letting federal regulators give financial institutions an extra eight months to comply with the privacy requirements in the Gramm-Leach-Bliley Act of 1999.
"The fact that the Clinton administration and its appointees have found it necessary to delay implementation of the dramatic privacy provisions in Gramm-Leach-Bliley is vivid proof that the new privacy proposals being made by the administration - before the existing proposals are in place - are nothing but politics," Sen. Gramm said. "These proposals are not a serious effort at making banking law. The banking regulators should be allowed to stick to rulemaking and not be dragged into election-year politics by the White House."
On spouses: Speaking on Thursday about how Richard C. Houseworth, outgoing chairman of the Conference of State Bank Supervisors, was having his wife substitute for him at the group's conference in San Francisco to attend a hearing on his nomination to the Federal Deposit Insurance Corp. board, Sen. Gramm warned: "It's always dangerous sending your wife ahead in your place, because no one will want you to show up."
On strange bathfellows: Sen. Gramm said later Thursday that he was particularly pleased to have worked with the Senate Agriculture Committee on legislation to reauthorize the Commodity Futures Trading Commission. In the past, getting those committees to cooperate, he said, "was like getting two people to share the same toothbrush."
On regulation and farm animals: Sen. Gramm's encore, though, came in discussing the Commodity Futures Trading Commission bill's legalization of single-stock futures. Trading these instruments, Sen. Gramm said, is vital to maintaining current U.S. dominance in the financial markets. "We are doing this because the goose that laid the golden egg is beginning to be attracted to a new potential perch in Europe," he said. "If we want the goose to continue to live in America, we have got to fill up the pond, scatter some corn, and chain up this dog named Regulation that has been chasing it around the barnyard."
The Conference of State Bank Supervisors at its annual meeting last week elected Thomas J. Curry chairman. He is the Massachusetts commissioner of banks.Elizabeth McCaul, New York's acting superintendent of banks, was chosen chairman-elect. Idaho Director of Finance Gavin M. Gee was elected vice chairman, and Georgia Commissioner of Banking and Finance Steven D. Bridges was tapped for secretary/treasurer.
Regulators were on the hot seat Tuesday, when bankers at the second day of the Consumer Bankers Association conference on the Community Reinvestment Act got the opportunity to air their questions - and grievances - about how the law is enforced.The first salvo came from Mary A. Laraia, senior vice president for community reinvestment at Bank One Corp., who challenged regulators to match their actions to their rhetoric. Calls for bankers to increase their efforts to raise the financial and technological literacy of people in their CRA assessment areas, she said, ought to be accompanied by CRA credit for doing so.
"If we are expected to attack this issue, we need to broaden the definition of the [CRA] service test," she said.
Donna M. Wilson, senior vice president and director of community affairs for Dime Bancorp, challenged a panel of regulators to defend their "increasingly myopic" application of CRA regulations.
Ms. Wilson's question drew this response from Ralph E. Sharpe, deputy comptroller for community and consumer policy at the Office of the Comptroller of the Currency: "We're dealing with a statute that is now 23 years old," he said. "We now live in a different environment, and we have tried to compensate for that in the regulations, but it is becoming increasingly difficult to do."