During last week's votes on financial reform legislation, House Banking Committee Chairman Jim Leach made good on his pledge to prevent the balloting from sliding into "chaos."

But frequently during the debate and in the halls outside the committee hearing room, fights over consumer protection measures, insurance sales rules, and deposit insurance limits had lawmakers and lobbyists in turmoil.

Decorum came close to unraveling on the evening of June 18, the second day of debate, when Rep. Bill McCollum, R-Fla., pushed the committee to take a second vote on an amendment requiring banks to offer low-cost "lifeline" checking accounts in order to be eligible to affiliate with insurance, securities, or commercial firms.

The provision, sponsored by Rep. Maxine Waters, D-Calif., had passed by a voice vote earlier that day. When Rep. Leach called for the vote, a host of "ayes" rose in support and no one answered "nay."

Nearly a hundred financial industry lobbyists were listening by speaker phone one floor above the committee's Rayburn House Office Building meeting room. Their reaction was stunned silence.

"Everybody just looked at each other and asked, 'Did that really happen?' " said Peter Kravitz, lobbyist for the Independent Bankers Association of America.

A host of banking lobbyists went into high gear, urging Republican staffers to repair the damage. After the committee returned from dinner several hours later, Rep. McCollum urged the new vote, sheepishly explaining that he hadn't been paying attention, though he voted for the measure.

Democrats exploded and threatened to bog down the debate by challenging other already approved measures. "A whole lot of these issue can be reopened," warned Rep. Barney Frank, D-Mass.

Rep. Waters said a new vote would demonstrate that lobbyists have too much power. "To come back at the 11th hour is embarrassing," she said.

Rep. McCollum quickly backed down, admitting that a new vote would "engender ill will."

Upstairs and in the hall outside the hearing room, the mood of many banking lobbyists was turning sour. The bill was now saddled with lifeline checking among other consumer protection rules, as well as unwanted restrictions on securities and insurance sales.

"The Christmas tree was getting heavy with ugly ornaments," said Richard F. Hohlt, a bank and thrift lobbyist.

Bankers were increasingly frustrated after days of vainly trying to change a provision allowing state insurance regulators to challenge bank powers granted by the Office of the Comptroller of the Currency.

Under the plan, states could ask the newly created National Council on Financial Services to decide whether the Comptroller's Office had overstepped its authority.

Although bankers said the measure could put at risk some existing products, such as annuities and letters of credit, no lawmaker was willing to sponsor a fix.

"The insurance industry had us for lunch," complained Annie Hall, lobbyist for Banc One Corp. "Here we are, the country's biggest banks, and we can't get anyone to sponsor an amendment on a financial bill."

Rep. Mike Castle, R-Del., finally agreed to introduce a measure written by lobbyists for Banc One, First Union Corp., and NationsBank Corp. Their plan, which passed easily, would allow the Federal Reserve Board to decide whether an insurance regulator had a valid complaint. Only if the Fed agreed, would the council get to rule on the matter.

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