WASHINGTON - House Banking Committee Chairman Jim Leach on Monday accused the Treasury Department of playing banks against thrifts to create opposition to his Glass-Steagall/regulatory relief package.
Treasury opposes the legislation's restrictions on the Office of the Comptroller of the Currency - a bureau of the Treasury.
"I would suggest that Treasury should be cautious about assuming the national interest is Treasury's interest," Rep. Leach wrote Treasury Secretary Robert Rubin.
"Treasury will not get all it wants," he added. "But it has been better protected than your department is willing to admit."
Rep. Leach lashed out in the three-page letter Monday after talking with Mr. Rubin and Treasury Under Secretary John D. Hawke Jr. by phone Sunday night.
Rep. Leach said separate legislation to capitalize the Savings Association Insurance Fund benefits thrifts and requires banks to foot part of the tab. In return, banks should get the power to underwrite securities and sell insurance, he said.
But because Treasury is pushing the thrift fund rescue bill and opposing the Glass-Steagall legislation, banks are likely to get the short end of the legislative stick, Rep. Leach said.
The thrift fund recapitalization "may be credible public policy," he wrote, "but the case is neither overwhelmingly compelling nor reflective of such an emergency that banks should take on liabilities gratis."
Rather than consider the issues separately, Rep. Leach reinforced his position that Congress should link its consideration of all these banking- related bills.
"I am obligated to insist on a galactic approach dealing with all issues at once," Rep. Leach told Mr. Rubin.