Rep. Jim Leach's latest gambit to pass major banking legislation shows the frustration now gripping his House Banking Committee.
Desperate to get the thrift insurance fund rescue and Glass-Steagall reform to the House floor, Rep. Leach announced Thursday that the only way to break the roadblock now stopping those bills is to fuse them into one massive package and roll over the opposition.
Initial reaction to his new strategy is unenthusiastic at best. "Unless the new bill is modified, it's hard to see how this moves the ball forward," said Edward L. Yingling, chief lobbyist for the American Bankers Association.
Despite the lack of enthusiasm, Rep. Leach's plan isn't being written off yet.
"You can theorize both ways: either this is a Sherman tank that mows down everything in its path, or it's a humongous pile that sinks under its own weight," said Paul A. Schosberg, president of America's Community Bankers, the thrift trade group.
In Rep. Leach's mind the "megasolution" unveiled after a meeting of committee Republicans, gives everybody a reason to drop opposition now stalling the separate pieces. Sure, banks will have to pay $600 million a year on bonds used to bail out the thrift industry. Yes, their favorite regulator, the Comptroller of the Currency, wouldn't be able to grant them new insurance powers for five years.
But in return, banks would get regulatory relief and new securities powers, and the thrift charter would be eliminated. They'll also be freed of some pesky regulations and get new securities underwriting powers. Thrifts will win lower deposit insurance premiums that equal those of banks.
Still, it's hard to find anyone outside the House Banking Committee who's optimistic.
Jonathan Fiechter, acting director of the Office of Thrift Supervision, is pushing hard for the thrift fund fix, and he worries that combining it with other legislation could cause delays.
While the thrift fund rescue has administration and bipartisan support, the same isn't true for the Glass-Steagall reform and thrift charter conversion proposals, he said.
The key to getting Rep. Leach's new plan to the floor may not be regulators or trade groups, but whether House Banking Committee Republicans truly support it.
Last week, Reps. Marge Roukema of New Jersey and Richard Baker of Louisiana were ardent backers. But sources said Reps. Bill McCollum of Florida and Edward Royce of California were opposed. Because only eight members attended Thursday's meeting, others have yet to weigh in.
"If enough concessions are made to members, perhaps they can pull something together," said Samuel J. Baptista, president of the Financial Services Council.