Two key lawmakers on Tuesday accused Comptroller of the Currency Eugene A. Ludwig of overreaching his authority to expand national bank powers.

Speaking at an Independent Insurance Agents of America conference, House Banking Committee Chairman Jim Leach said Mr. Ludwig views himself as "a regulator with regal authority to change the law."

In an earlier speech Tuesday to the agents' group, Rep. John D. Dingell, the House Commerce Committee's top Democrat, called for Mr. Ludwig's resignation.

Rep. Leach aimed most of his criticism at a new OCC rule that opened the door for national banks to enter new businesses through direct operating subsidiaries.

Mr. Ludwig has come under increasing fire for approving the so-called "op-sub" rule. At a March 20 hearing, Senate Banking Committee Chairman Alfonse M. D'Amato accused the comtproller of "jeopardizing the taxpayers" by approving the rule.

Rep. Leach focused his criticism on an application filed by NationsBank last week to enter the real estate development business. (The lead bank of the Charlotte, N.C.-based NationsBank Corp. simultaneously proposed financing real estate leasing.)

If the Comptroller's Office approves the request, Rep. Leach warned, banks will "enter the landscape of real estate development without any restraints."

Under this scenario, when a firm or individual asks a bank to finance a real estate development project, "the bank can say that's such a good idea we'll do it ourselves," the Iowa Republican said. Allowing banks into this business would expose the deposit insurance funds to undue risk, he added.

"You'll end up spreading the safety net across the board, and the U.S. taxpayer (would pay) if you make a mistake," he said. "If you look at the track record of financial institutions (entering nonfinancial businesses), it is the public that has footed the bill."

Rep. Leach also questioned Mr. Ludwig's April 3 recusal from the NationsBank applications. "How do you have accountability when you are dealing with the nameless?" Rep. Leach asked. "It is very unusual to recuse. It is a very difficult circumstance."

Rep. Dingell said the recusal ought to lead to Mr. Ludwig being forced out of the OCC.

"Recusal is a good first step toward a more productive goal: removal," the Michigan Democrat said. "I'm not saying that because I think there are any ethical problems here. This is simply a matter of stupid policy."

OCC spokesman Dean DeBuck said Tuesday's criticisms will not affect the agency's action on the applications.

"We're in the comment period for these applications, and we will be reviewing and entertaining all the comments we receive," Mr. DeBuck said.

"The OCC carefully reviewed its statutory authority before issuing" the op-sub rule, he added, "and we concluded the regulation is well grounded in the law."

The OCC declined to respond to Rep. Dingell's suggestion that Mr. Ludwig be removed from office.

Despite his criticism, Rep. Leach admitted Congress is not likely to attempt to scale back the Comptroller's powers.

"It is unrealistic to expect Congress to put a moratorium on the Comptroller," he said. "It has to be recognized that the banking community will strenuously object."

During the last Congress, House leaders forced Rep. Leach to include a comptroller's moratorium provision in financial modernization legislation, but strong opposition from the banking industry killed the bill.

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