Fed Governor Proposes New Panel on Bank Issues

WASHINGTON - Fed Governor John P. La Ware added his voice Tuesday to the chorus protesting bankers' "regulatory burden" and urged Congress to avoid mandating "minutely detailed regulation."

Mr. La Ware suggested the creation of "a nonpolitical commission to address a broad range of banking issues and offer guidance for legislative and regulatory change." He did not elaborate on the idea.

The Federal Reserve governor was one of several regulators who appeared before the House Banking Committee's subcommittee on financial institutions to discuss the level of regulation.

Although legislation to ease regulations is not expected to make headway this year, many bankers have designated it their top legislative priority.

Sen. Robert Dole of Kansas, the Senate Republican leader, has introduced legislation to eliminate a number or requirements to which banks object, as has Rep. Doug Bereuter, R-Neb.

In addition, the Department of Treasury is expected to forward its own bill to Congress this week.

The package will probably be introduced in the House by Rep. Chalmers Wylie, R-Ohio, the banking committee's senior Republican.

Elsewhere on Capitol Hill, a House Government Operations subcommittee heard bankers and banking experts warn that regulation is robbing the industry of its competitiveness.

Anthony P. Terracciano, chairman of First Fidelity Bancorp., Lawrenceville, N.J., said that after overseeing two turnarounds, including that of his current institution, he doubted he would undertake another in the current regulatory climate.

In his testimony, Mr. LaWare objected in particular to a provision in the 1991 banking law that requires banks to "report detailed data on their loans to small businesses and farms."

While potentially useful, he said, "bank accounting systems simply do not lend themselves to providing this information in an easy way."

Rep. Richard Neal, D-Mass., the sponsor of that provision, angrily responded that the law was necessary to monitor banks who cut off credit to small businesses and then "report record profits because they haven't passed along cuts in the discount rate."

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