After a week of internal skirmishing, the Bankers Roundtable still doesn't have an answer for Jim Leach.
The House Banking Committee chairman needs the big-bank trade group's support to convince Republican leaders to schedule a vote on his Glass- Steagall reform bill.
Though the bill has been the group's top priority for eight months, divisions within its ranks have prevented it from backing the Iowa Republican.
"It's been extremely frustrating for those of us who want to see the process go forward," said one lobbyist for a Roundtable member bank that supports the bill.
From Wednesday through Friday last week, Rep. Leach waited in vain for the group to send word, which had been promised. Instead, the group's 22 board members haggled among themselves, ripping up draft after draft of a letter.
The Roundtable's indecision peeved Rep. Leach and frustrated the banks that support the bill, including NationsBank, Morgan Guaranty, Banc One, Fleet Financial, Norwest, and Bankers Trust. They argue the group should provide the unanimous voice that big banks can't get in the larger American Bankers Association.
"Why is there a Bankers Roundtable? If they can't support this bill, why don't we just have the ABA?" asked another lobbyist for a bank supporting the bill.
Despite the delay, some Roundtable members insist the group will ultimately back Rep. Leach's effort. But to appease holdouts, sources said the group is likely to demand new provisions. These may include allowing bank holding companies - not just nonbanks - to own uninsured wholesale financial institutions. The group also is expected to ask Rep. Leach to bar states from blocking common ownership of banks and insurance companies.
Staff members for Rep. Leach say they don't expect any of the Roundtable's demands to be a problem, but opponents of the bill, led by Barnett Banks Inc. of Jacksonville, Fla., and KeyCorp in Cleveland, remain adamant.
Barnett has threatened to undercut any Roundtable support by penning a letter to House leaders opposing a vote, sources said. Barnett and KeyCorp also have powerful support from the Clinton administration, which is pushing the banking industry to reject the bill.
On May 14, Roundtable board members heard last-ditch pitches from Rep. Leach and Treasury Under Secretary John D. Hawke Jr. Mr. Hawke argued that the bill would restrict bank insurance powers and would force banks to set up expensive holding company affiliates to add new securities powers.
"A few large banks have a vested interest in getting this passed, and they're willing to sell out the rest of industry to get what they want," he said.
Rep. Leach said he recognized the bankers' concerns, but told them to trust the legislative process, arguing that the measure could be improved when it moves on to the Senate.
Samuel Baptista, president of the Financial Services Council, agreed with Rep. Leach. "Maybe the legislation isn't ready to get enacted, but at every step in the process it gets better," he said.
Roundtable staff members refused to comment Friday.