WASHINGTON - A newly beefed-up team of lobbyists at the Financial Services Roundtable will use this session of Congress to try to undo a key privacy provision of the Gramm-Leach-Bliley Act and to back legislation that would toughen oversight of Fannie Mae and Freddie Mac.
The roundtable's president, Steve Bartlett, said that board members at their annual meeting in Florida this week directed the group's government relations arm, which recently hired two lobbyists to what is now a seven-member lobbying team, to pressure Congress to adopt national uniform privacy standards.
Overall, he said, roundtable board members are pleased with the way that the privacy requirements in Gramm-Leach-Bliley are being implemented, but a provision that permits states to adopt tougher state standards, introduced by Sen. Paul Sarbanes, D-Md., sows "seeds of instability" in the banking system.
"You can't have one state set different standards, because then you have no standards or disjointed standards," Mr. Bartlett said. "This is a large issue that you have to get right," because privacy considerations affect every banking product.
No states have passed such legislation yet. But, Mr. Bartlett said, "We have a fear that at some point the Congress or state legislatures will make further changes and disrupt the marketplace."
James L. Pitts, executive director of the Financial Services Coordinating Council, predicted an uphill battle for any bill promoting national privacy standards. "I think the chances are slim to none" that any such bill will become law, he said. "There just doesn't seem to be the political consensus on Capitol Hill as to what federal preemption would look like."
Mr. Pitts, whose organization was formed primarily to address financial institutions' privacy concerns, said that his group will focus on preventing the passage of any laws, at the state or federal level, that would increase privacy protections.
The roundtable has hired longtime banking lobbyist Theodore A. Doremus, who had previously represented banking companies such as J.P. Morgan Chase, as a special counsel for privacy issues. The group's second new hire, Andy Barbour, a former official in the office of the United States Trade Representative, is scheduled to start work Monday and will focus on securities and insurance.
Also on the roundtable agenda is reform of the regulation of government-sponsored enterprises such as Fannie Mae and Freddie Mac.
Mr. Bartlett said his members support legislation introduced last week by Rep. Richard H. Baker, R-La. The bill would abolish the enterprises' current safety-and-soundness regulator, the Office of Federal Housing Enterprise Oversight, and transfer that authority to the Federal Reserve Board.
Another item on the roundtable's wish list is that Congress establish a clear definition of the enterprises' mission and be strict in keeping them on that mission.
The group also favors increasing the 20-year-old cap on individual IRA contributions to $5,000 per year from $2,000. "We have waited long enough to increase IRA coverage," he said. "The government is saying that people can provide for their retirement, but in fact you can't provide with a $2,000 cap. The math doesn't work."
Other priorities include pushing for laws to restrict abuse of class action lawsuits and for passage of bankruptcy reform legislation. The roundtable will also actively oppose efforts under way to raise the $100,000 coverage limit of federal deposit insurance.
