WASHINGTON - The Independent Bankers Association of America has joined forces with an insurance group in an effort to block legislation permitting broad affiliations between their two industries.
"We will work with any allies we can find," said the group's head, Kenneth A. Guenther, of the alliance with the Independent Insurance Agents of America.
The two organizations wrote to House Speaker Newt Gingrich Monday to express their mutual opposition to the insurance amendment sponsored by Rep. Richard Baker, R-La., and added to regulatory relief legislation that cleared the House Banking Committee June 29.
The House leadership was scheduled to discuss the amendment, which permits banks to affiliate with insurance companies in any state that does not specifically bar the practice, late Monday afternoon.
"This approach is unsupportable from a small-business and consumer level, as well as a states' rights perspective," the two groups argued in the letter. "Huge market power would become concentrated among a small number of large banks and securities firms.
"Small financial services providers, insurers, agents, and banks cannot buy-up in this big-business, members-only environment."
Paul Equale, the chief lobbyist for the agents group, said the joint effort with the small bank group was a natural fit.
"This represents the marrying together of two very powerful forces who, on the substantive issues, share the same concerns," Mr. Equale said. "We represent a similar grassroots constituency to a large degree."
The letter drew a quick rebuke from Philip S. Corwin, lobbyist for the American Bankers Association of America.
"This is nonsense, because the Baker amendment would let community banks that are in holding companies - which the vast majority are - hook up with insurance agencies in about 30 states," Mr. Corwin said. The ABA supports the Baker amendment.
"Mr. Guenther has hooked up with biggest enemy of the banking industry's quest to be competitive," Mr. Corwin added.
However, Mr. Guenther said his relationship with the agents would be limited.
"We simply have a common interest in eliminating the Baker amendment," he said. "The cooperation is narrow and limited to that feature of the legislation."
In a related event, consumer advocate Ralph Nader last week urged Rep. Gingrich to subject regulatory relief legislation to more hearings.
In a July 7 letter, Mr. Nader argued that an already bad bill was made even worse by the Baker amendment, and said a more thorough airing is now required.