WASHINGTON -- The Independent Bankers Association of America is making a last-ditch effort to hang up the interstate banking bill.
The community banking group's members are asking their senators to put a hold on the bill. A hold bars the Senate from approving a piece of legislation by unanimous consent, or without debating a measure before the vote.
While the Senate is wrangling with the massive health care reform legislation, unanimous consent is the only avenue for other bills to gain approval.
"The bottom line is that there is nothing in this bill that is good for community bankers," an Aug. 11 fax to IBAA members reads. "We need your help to keep this interstate legislation from becoming law as long as possible." While the fax, titled "Banker Alert," looks like a generic distribution, IBAA executive vice president Kenneth A. Guenther said it was sent only to "selected" members.
"We feel this should be debated on the Senate floor," he said. "We have asked selected people ... to insure that the interstate bill does not pass by unanimous consent."
If it's successful, the IBAA's move will compound the interstate bill's existing problems. Three senators already have slapped separate holds on it.
"We may not be able to stop this speeding locomotive, but we still have time to at least slow it down by placing a couple of obstacles on the tracks," the IBAA fax states. "Please help by contacting your senators and urging them to support the community bankers in your state by placing a hold on this bill now."
Sen. Phil Gramm, R-Tex., has a hold on the bill because he wants to kill a provision inserted by the House that bars banks in Texas from making home equity loans. Sen. Bob Graham, D-Fla., is concerned about how the bill treats foreign banks. Finally, Sen. Howard Metzenbaum, D-Ohio, is demanding that Congress restore his provision extending the statute of limitations to five years prior to a bank's failure for simple and gross negligence claims against directors and officers.
The conventional wisdom in Washington continues to be that the bill will pass before Congress adjourns this year. Still, the more objections raised against the bill, the harder approval will be.
Senate Banking Committee Chairman Donald W. Riegle has asked Majority Leader George Mitchell to schedule floor time for the bill after Labor Day. That doesn't leave much time, as Congress is slated to adjourn for the year on Oct. 7.
Interstate banking has been approved by both the Senate and House. The two versions of the bill went to a conference committee of legislators from both chambers, where a compromise was hammered out. The House approved that compromise and the bill awaits a final vote by the Senate, which wants to send it to the White House in tandem with the community development bank bill.
The IBAA has opposed the legislation from the start, particularly provisions that override a state's right to bar interstate banking.
"We do regard it as special-interest legislation benefiting a handful of banks to the detriment of many others," Mr. Guenther said.