WASHINGTON -- Senate Republicans are taking a new look at regulatory relief, and banks stand to benefit.
Sen. Thad Cochran, R-Miss., chairman of the Senate Republican Working Group, announced Tuesday the creation of a "regulatory relief working group" that will focus on introducing legislation during the beginning of the Congress.
In drafting the measure, the new working group will "try to ... take into account the economic consequences of those regulations on the cost of compliance for local governments and businesses and individuals who are now excessively burdened by federal government regulations," the Mississippi Republican said.
"We intend to do something about that," he added. "That is one of the high priorities of this new Republican Congress."
Although Sen. Cochran did not specifically mention banks as targets for paring back regulation, the fact that the reg relief working group will be co-chaired by Senate Banking Committee member Christopher H. Bond, R-Mo., could put bank rules in play.
"You can presume that, since he's a member of the Senate Banking Committee, banking will be part of the overall review of regulatory burden," said an aide in Sen. Bond's office. "I really don't think that he would leave banking out of this."
Sen. Bond's interest in banking, coupled with the GOP "Contract with America," spells good news for advocates of regulatory relief for financial institutions, said Joe Belew, president of the Consumer Bankers Association.
"There is going to be reg relief in the contract, some of which will probably pertain to banking," Mr. Belew said. "If there are needed reforms, and they don't get covered by the contract, Sen. Bond's group would give you a second bite of the apple."
Sen. Cochran's announcement came on the heels of a Dec. 12 letter from the joint Republican leadership asking the Clinton administration to freeze all federal rulemaking during the first 100 days of 1995.
The moratorium is intended to allow the GOP to weigh the benefits and costs of new regulations.
"Excessive regulation and red tape have imposed an enormous burden on our economy," said the letter, which was signed by Senate Republican leader Robert Dole and incoming Speaker of the House Newt Gingrich. "Private estimates have projected the combined direct cost of compliance ... as well over $500 billion per year."
However, the move may also hamper progress on regulations that the industry has been pushing for, according to Karen Shaw, president of ISD/Shaw Inc.
"There was a similar 100 days' moratorium early in the Bush administration, and it really screwed things up," Ms. Shaw said. "Despite the current belief that all regulation is bad regulation, there are a variety of rules that the industry is trying to promulgate that may get put off. A third of a year is a long time."
