WASHINGTON -- Sen. Christopher J. Dodd's defeat Friday in the race for Senate Democratic leader drew mixed reactions from the banking industry.
Senate Democrats, in a secret ballot Friday morning, gave Thomas A. Daschle of South Dakota a one-vote victory over the Connecticut lawmaker.
In the eyes of the industry, Sen. Dodd's 13-year tenure on the Senate Banking Committee would have made him a choice replacement for the retiring party leader, George Mitchell of Maine, who was less familiar with industry issues.
"So much is done at the committee level that it is key to have someone like him on Senate Banking, but overall I think it would be more important that Dodd take the minority leader post," said Peter Blocklin, Senate lobbyist for the American Bankers Association. "Theoretically, you are only one Congress away from majority leader."
However, a leadership position would have shifted Sen. Dodd's time and attention away from banking. The minority leader acts a "traffic cop" for legislation reaching the Senate floor.
Instead, the 50-year-old Connecticut Democrat will become his party's second-highest ranking member on the banking committee behind Paul Sarbanes of Maryland.
"He has been extremely valuable on the Banking Committee, and he's a terrific legislator," said John Rippey, legislative director for the Bankers Roundtable. "If he had gotten the minority leadership, he would have been doing much less heavy lifting in the committee than he did for us in '94."
Sen. Dodd paved the way for passage of the interstate banking and branching law this year.
Although he originally blocked the measure with an amendment limiting bank insurance powers, Sen. Dodd withdrew it, acknowledging that the measure did not have "enough horsepower or interest to move beyond the committee."
That decision knocked down the bill's last major hurdle. "He was instrumental on interstate, and continued to push strongly for it after he dropped his amendment," said Karen Shaw, president of ISD/Shaw Inc., a bank consulting company which tracks bank legislation and regulation. "He is one of the most active remaining Democrats on Senate Banking."
Joe Belew, president of the Consumer Bankers Association, said Sen. Dodd's negotiating skills will be useful in a Republican-controlled Senate.
Sen. Dodd's third term in the Senate expires in 1999. He served six years in the House before winning his Senate seat in 1980.
While banks like Sen. Dodd, there is no denying that he has used his committee seat to protect his home state's large insurance industry.
"It's like hogs in Iowa," Sen. Dodd has said of the insurance industry's ties to Connecticut.