and not enough of a politician. Over the course of two decades in Congress, the Iowa Republican has built an envied reputation as an intellectual. But after nearly a year as chairman of the House Banking Committee, Rep. Leach's character is coming into clearer focus, bank lobbyists say, and his disdain for politics is beginning to look like less of a virtue. Bankers who had counted on Rep. Leach to guide regulatory relief, Glass- Steagall repeal, and other major legislative initiatives through Congress are beginning to ask if he has the political skills to run the banking committee. "He's discovering to his dismay that doing the right thing doesn't automatically, mystically produce political consensus," said Paul A. Schosberg, president of American's Community Bankers, the thrift industry trade group. After laboring for 18 years in the congressional minority, Rep. Leach has not developed the coalition-building instincts so necessary for a committee chairman, Mr. Schosberg said. "I have tremendous ambivalence towards Jim Leach," he said. "There are few guys I would rather sit down with and debate the issues, but there are few who have frustrated me more." Too often, Rep. Leach refuses to accept political reality, his critics say. The most recent example: his plan to shift banks' burden for the thrift fund rescue to well-connected Fannie Mae and Freddie Mac. The proposal could have been a dream come true for banks. But his surprise Oct. 20 announcement not only gave the industry no time to gear up lobbying efforts, it also angered fellow House Republicans who were in no mood for dealing with such a volatile issue. One banking lobbyist called the plan "a good idea at the wrong time." House leaders certainly thought it was the wrong time and quickly shot down the proposal. Who would have believed Rep. Leach would need to resort to last-ditch efforts to drum up industry support for his legislation? When he took the chairman's seat of the House Banking Committee last January, most bankers eagerly anticipated long-awaited legal changes. Instead, his bill to grant banks securities underwriting powers and to reduce paperwork has divided bankers. "A lot of bankers were pretty optimistic of how it would play out this year. But it's a real disappointment so far," said James M. Culberson Jr., chairman of First National Bank and Trust in Asheboro, N.C., and president of the American Bankers Association. Still, past chairmen have tried to crack the Glass-Steagall wall, and come up short. The committee approved legislation repealing the Depression- era law in 1988 and again in 1991, only to see the measure shot down in the crossfire of special interests both times. Still, as bankers see it, 1995 has cost them a lot of money and they have little to show for it. They're being saddled with a $12 billion bill to help rescue the thrift deposit insurance fund and they're not getting Glass-Steagall repeal or curbs in thrift industry powers in return. Critics say Rep. Leach lacks the political instincts to build consensus for banking bills. But his supporters say he has held his own in the political fray. The progress on Glass-Steagall and the thrift fund rescue are significant accomplishments and the current congressional term is only half over, said Edward L. Yingling, chief lobbyist for the ABA. "It's difficult to anticipate a final score at halftime," he added. If bankers are angered by their tab for the thrift fund rescue, they should blame themselves, said Roger Beverage, president of the Oklahoma Bankers Association and chairman of the ABA's state association division. "I suspect had bankers been as excited two months ago, this whole mess would have taken a much different approach and I suspect Rep. Leach would have been in front of it," he said. "What he's done is tremendously important. He's tried to work with the industry more so than any other banking chairman, going back 20 years," Mr. Beverage said. Still, very little of Rep. Leach's agenda has been enacted. Hoped-for reform of the Community Reinvestment Act has been dropped. Glass-Steagall repeal and red tape relief are in limbo. Efforts to merge the bank and thrift charters have been delayed. Worst of all, House leaders pressured Rep. Leach to add a five-year ban on new national bank insurance powers to the legislative package that includes the Glass-Steagall and regulatory relief bills. Though the ABA now opposes the Glass-Steagall/regulatory relief bill and the industry as a whole is split over the legislation, Rep. Leach said he has a mandate to move ahead. "We now have a bill that is extremely complex but which has consensus in the largest measure, with the exception of the insurance issue," Rep. Leach said. Rep. Leach also argues he has reached consensus even on the contentious insurance issue. The actual restrictions negotiated with House leaders are mild, he said, and banks could live with them. He blames the banking industry's opposition on scare tactics by the Treasury Department and the Comptroller of the Currency. Rep. Leach said he was prepared for fierce debate among the banking, insurance, and securities industries, but the Treasury Department's criticism "astonished" him. "I have been taken aback significantly by the intensity of competitiveness of the Treasury. I was more caught off guard by Treasury than by my own leadership." Aside from the comptroller moratorium, Rep. Leach said, the Treasury Department is jealous of provisions in the Glass-Steagall repeal bill calling for Federal Reserve Board regulation of uninsured wholesale financial institutions operated by brokerage firms. Treasury officials said charges of jealousy are "nonsense" and say they are baffled by the flap with Rep. Leach. "Our positions on these measures have been consistent and consistently ignored," said John D. Hawke Jr., undersecretary of the Treasury. The agency's disagreement with Rep. Leach is simple, Mr. Hawke said: "He's trying to pack anticompetitive measures in a bill to promote competitiveness." The Treasury fight is one Rep. Leach brought on himself by tightly controlling legislative language and not working with the industries and agencies affected by his bills. Critics say Leach has an "imperial" approach to drafting legislation. Some lobbyists have complained that by "dictating" the Glass-Steagall repeal draft, Rep. Leach squandered the opportunity to build support in the industry and Congress. "In order for Jim to be more successful than he has been so far this year, he has to attach greater importance to building consensus among his committee members and affected industry groups," said Bert Ely, president of Ely & Co., a consulting firm in Alexandria, Va. Without better support, Rep. Leach will have a hard time in future negotiations with Senate counterpart Alfonse M. D'Amato, whose political gamesmanship is legendary. Rep. Leach has already suffered at the hands of the New York Republican, who two weeks ago effortlessly rejected his plan to eliminate the thrift charter. "If you're looking across the table at a guy like D'Amato, you need as much strength as you can muster," one lobbyist said. Despite the ruckus over the insurance restrictions and the thrift rescue bill, bankers owe Rep. Leach a great debt, said Kenneth Guenther, executive vice president of the Independent Bankers Association of America. By leading efforts to fix the fund and setting the stage for elimination of the thrift charter, Rep. Leach has ensured there will not be another thrift crisis, he said. "We now have a legislative solution to a long-standing trauma that has influenced banking legislation for the last 15 years. That point is not adequately recognized."

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