Sen. Lauch Faircloth, a freshman Republican from North Carolina, is a staunch supporter of the GOP's pro-business agenda who sits on the Senate Banking Committee. In an interview, the 68-year-old senator said he recognizes the banking industry is frustrated by the preoccupation with the Whitewater investigation, which is being conducted primarily by banking panel members.
But Sen. Faircloth said the Senate still has a good shot at passing pro- banking legislation this year.
With the Whitewater investigation scheduled to end next month, Sen. Faircloth predicted that committee Chairman Alfonse M. D'Amato would shift his attention back to banking.
Sen. Faircloth is an outspoken critic of President Clinton and the First Lady. Referring to their failed land deal, which spurred the Whitewater investigation, he remarked in a recent speech, "It's always seemed kind of strange to me that a couple that couldn't buy 200 acres of poor Arkansas land without a national fiasco could run the country."
Before his election to the Senate in 1992, he was North Carolina secretary of commerce, operated a family farm, and owned construction companies and an automobile dealership.
Sen. D'Amato has waited for the House to move financial modernization legislation. Should the Senate continue to wait, given all the problems the House has had moving its Glass-Steagall reform bill?
FAIRCLOTH: Doesn't Mr. Leach want to roll regulatory reform and Glass- Steagall all into one package? I don't think you can do that. Not that I'm opposed to it, but I don't think you can muster the support. It just isn't going to happen.
If Rep. Leach's bill doesn't move, would you like to see the Senate move more aggressively in repealing the Glass-Steagall Act?
FAIRCLOTH: I would. But the reality of it is we put a lot of time on Whitewater. That's going to end now - it looks like the 14th of June. Certainly we would move more aggressively on regulatory reform and a lot of other things.
The Community Reinvestment Act is one area of regulation many Republicans would like to see stripped back. Do you agree?
FAIRCLOTH: I think it needs to be cut back. Certain groups of people in various cities have simply used it as blackmail to block mergers and to shut down the business of the banking system. Literally, that's what it's amounted to.
But I don't think we can do that as part of regulatory relief. These problems took us 30 or 40 years to get into them. We're simply not going to be able to get out of them in six months.
What do you think of the job Sen. D'Amato has done running the committee?
FAIRCLOTH: I have a very good relationship with Sen. D'Amato. I think he's done a good job. He's been very fair. In fact, I think you would get the same answer from Sens. (Paul) Sarbanes and (Christopher) Dodd (the panel's ranking Democrats). There may have been a perception that he would not. I'm sure some people did not think he would.
Recently you chaired a subcommittee hearing on Fannie Mae and Freddie Mac. There has been a lot of criticism of the large profits they make and the low-interest borrowing they get from the government. What is your view of the role they play in the mortgage market? Does Congress need to be taking a look at them?
FAIRCLOTH: Certainly there is talk about privatizing them, but at this time I would not support that. It would seem they've done a good job. They're the only quasi-government agencies I know of that made any money. I met with (former Fannie Mae vice chairman Franklin D.) Raines and (Freddie Mac chairman) Leland Brendsel recently. Frankly, I was delighted to know they were making some money and doing these affordable house loans and meeting the goals that have been set for them with a very low percentage of foreclosures - I believe the rate was 1.5%.
Banks have opposed plans to capitalize the Savings Association Insurance Fund. Do you agree the rescue is unfair because it forces banks to assume payments on Fico bonds that were used to bail out the thrift industry in the late 1980s?
FAIRCLOTH: I don't see this as an excessive burden on banks - it's only 2.5 cents per $100. I think they're going to have to share the burden.
Is there anything on your agenda you want to do on the banking committee?
FAIRCLOTH: Regulatory relief. I think that's really the major issue, and that's the one we're going to push to get out.
Sen. Faircloth favors cutting back, CRA but says he doesn't think it can be done as part of the regulatory relief bill.