Bankers have complained for years about the ever increasing burden of regulation. Tuesday's Republican landslide presents the industry with a historic opportunity to do something about it.

In both the House and Senate, the banking and thrift industries will find Republican majorities that believe they have a mandate to whittle back government regulation. More than that, the industry may have an ally in the White House.

President Clinton was already a believer in the cause of regulatory relief. But the pounding his party took at the polls Tuesday will force him to move to the center next year. And the center, it should be noted, has moved several degrees to the right.

As a result, all things are possible for banks and thrifts -- even a rollback of the Community Reinvestment Act, the law banks complain about most loudly.

"A carefully crafted Community Reinvestment Act bill that eases regulation and extends the law to nonbank financial companies could pass," said Karen Shaw, president of ISD/Shaw.

A bill like that would not only make life easier on banks, but would also help settle some old scores. Bankers have argued for years that they operate at a disadvantage to nonbank competitors who are not bound by the same rules.

The nonbanks -- securities firms, big insurance companies and mutual funds -- would certainly oppose any effort to extend the Community Reinvestment Act. But they are not the legislative powerhouses they were in the past. And their power may have been diminished still further by the Republican landslide.

"Small town Republicans are close to the small banks," noted Ms. Shaw.

Already, industry representatives are making plans for next year. "We've had Democratic Congresses, starting in 1978, that dropped one regulation after another on community banks," complained Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America. "Now it's time to go through the regulations in a systematic way in terms of trying to clean them out."

The reshuffling of Committee chairmen is bound to help the industry. On House Banking, the very liberal Henry B. Gonzalez, D-Tex., will step aside in favor of a moderate Republican, Rep. Jim Leach of Iowa.

The chairman's power is not total: the major weapon in his arsenal is his ability to set the agenda. But Rep. Gonzalez uses that power as effectively as any chairman.

Two years ago, when the industry won a major floor vote on Fair Credit Reporting Act reform, for example, he simply pulled the bill from further consideration.

A more dramatic example of the difference between Democratic and Republican rule may be provided by the changing of the guard on the House Education and Labor Committee.

The outgoing chairman, Rep. Bill Ford, D-Mich. sponsored legislation that eventually will turn the student lending program over to the federal government. The man who will take over the panel in January, Rep. Bill Goodling, led the fight to keep student lending in the hands of the private sector.

Student lending is almost a perfect issue for the banking industry to pursue in the next Congress. Republicans, mistrustful of government, can be counted on to agree when bankers argue that the private sector is best suited to handle the task of student lending.

Bankers hope Rep. Goodling will move early to demand a strict accounting of the program. Most believe any honest analysis will prove the government lending program is more expensive and less efficient than the private sector system it is replacing.

Time is critical. The law passed last year permits the government to take over 5% of the market this year and 25% next year. Each uptick in government market share is likely to drive more private lenders out of the business, and they may not want to return if the direct lending experiment is ended.

However friendly the new Republican Congress may look to the business community, nobody should underestimate the strength of the old guard. Consumer groups and their allies on Capitol Hill are not likely to stand by idly while conservatives dismantle programs they have put a lifetime of sweat into building.

And the opportunity banks and thrifts will have next year may prove rare indeed. Forty years in the making, it is a moment that could pass quickly and not return for many years to come.

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