WASHINGTON -- The voters in Tennessee are getting ready to have their say, and their voices could speak volumes about the direction of Washington banking legislation.

Democratic Sen. Jim Sasser, a senior member of the Senate Banking Committee, is locked in a tight race with Nashville surgeon Bill Frist, and right now the contest is too close to call.

That's a particular cause for concern to Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America.

"I think Sasser has the greatest feeling for community bankers of anyone on the Senate Banking Committee," Mr. Guenther said.

While the IBAA has only limited ability to influence the race, the results will have a great influence on issues near and dear to Mr. Guenther's heart. Three years ago, Sen. Sasser was one of those who stood fast by the IBAA in support of existing levels of deposit insurance coverage, Mr. Guenther recalled.

Next Tuesday's elections will affect the entire financial services industry in a dozen different ways.

Individual members of Congress who bankers have spent years courting could be history come January. And the party balances in the House and Senate, which set the philosophical tone and determine who holds the gavel, are also up in the air.

Most banking issues are not considered partisan -- a lawmaker's views on Glass-Steagall repeal, for example, aren't usually linked to his party affiliation.

But in the area of services for the poor, including Community Reinvestment Act reform, bankers think they may benefit if Republicans increase their numbers significantly, as is now expected.

"The balance, on issues like CRA, shifts from 'against us' to 'for us,'" said Edward L. Yingling, executive director of government relations for the American Bankers Association.

"But on Glass-Steagall, new powers, and so forth, it doesn't really matter," he added.

The GOP appears to have at least an even chance of taking control of the Senate and a long-shot prospect of winning the House.

Should Republicans capture 51 Senate seats, control of the Senate Banking Committee Will pass from the Democratic heir apparent, Sen. Paul Sarbanes of Maryland, to Republican Alfonse M. D'Amato -- a prospect that unnerves some bankers.

Sen. D'Amato has long been seen as an ally of the securities and insurance industries, and bankers and privately bank lobbyists worry that they could be in for some lean years under a D'Amato stewardship.

Among other things, Sen. D'Amato would be expected to move. quickly on legislation that would limit the ability of banks to offer insured annuities.

Privately, one bank lobbyist expressed the hope that Republicans would win the House and lose the Senate That would mean Sen. Sarbanes would take the Senate Banking Committee, while the House Banking Committee would fall to Rep. Jim Leach, R-Iowa.

Rep. Leach is a moderate Republican who worries more than most about risk to the banking system. He is a capital hawk and the sponsor of legislation to tighten derivatives regulation.

With his midwestern back ground, he is viewed as a soul mate by community bankers. Larger bank representatives see him as generally pro-business and light years better than the committee's current Democratic chairman, Texas populist Henry B. Gonzalez.

Even if they miss gaining control of either chamber. Republicans may win-effective control of the House and Senate. A coalition of Republicans and conservative Democrats could control both chambers, even if a Democrat holds the gavel. The more conservative Congress that would emerge in that scenario would likely be friendly to the financial services industry and to business in general.

Among the seats likely to be reshuffled in Tuesday's balloting are those held by a number of key House Banking Committee Democrats.

"Two Democrats I'm worried about are Larry LaRocco and John LaFalce," said Sam Baptism, president of the Financial Services Council.

Rep. LaRocco, a two-term Idaho Democrat who has been moving steadily up the leadership ranks, is a former stock broker who has focused attention on the nation's low rate of savings -- and what can be done about it.

"It would be a shame to lose him," said John McKechnie, the political director for the Credit Union National Association. "It's just a real bad year for Democrats."

John J. LaFalce. a 20-year House veteran, is the likely candidate to take over the House Banking subcommittee on financial institutions the panel that deals with most mainstream banking legislation. Two years ago, as Democrats won the White House for the first time in 12 years, Rep. LaFalce was reelected with 55% of the vote -- a tight race for an incumbent.

With Republicans riding high in the polls, most of the endangered incumbents are on the Democratic side of the aisle. One exception among banking committee members is Rep. Jim Nussle, a second-term Iowa Republican who was reelected two years ago with only 51% of the vote.

The only other banking committee members who appear to have a fight on their hands are freshmen. They include:

* Rep. Carolyn Maloney, a Democrat who represents New York's traditionally Republican "silk-stocking" district. She won with President Clinton at the top of the ticket in 1992. but Republicans think they have a good shot at recapturing the seat.

* Rep. Maurice Hinchey, a New York Democrat who barely won election two years ago;

* Rep. Eric Fingerhut, D-Ohio, Rep. Fingerhut is one of the freshman class leaders. but Ohio leans heavily Republican.

Others in trouble include Rep. Elizabeth Furse. D-Ore. and Rep. Herb Klein. D-N.J.

Meanwhile. Sen. Connie Mack, a Florida Republican who once worked as a banker. appears to be cruising to an easy reelection. Likewise. Maryland's Sen. Sarbanes appears to have locked up his reelection bid.

Bankers are looking beyond the banking committees to other panels that influence the industry and to the leadership as well. Rep. Peter Hoagland, D-Neb., a former banking committee member who holds a seat on the all-important Ways and Means Committee. is in danger of losing the seat he has held since 1989. He has been picking up considerable financial support from the industry.

And the most powerful Democrat of all, House Speaker Thomas S. Foley, has been running behind for months.

"All of us are getting around the Speaker," said Marty Farmer, the lobbyist for Barnett Banks, Inc., Jacksonville, Fla. "We don't care about his opponent. And the Speaker is still the Speaker."

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