Some credit union lobbyists sensed an ulterior motive when Edward L. Yingling, the American Bankers Association's chief lobbyist, warned lawmakers against using a regulatory relief bill to expand credit union powers.

It's more than a narrowly targeted complaint, said one credit union representative. It's a hedge against a potentially bad bill.

"They're setting up a straw man," he said. "If things don't go right for them in the reg relief bill, they can say they oppose it because those credit unions got something in there. Otherwise, I don't know why they did it. Excess paper? Free time?"

Bank lobbyists are beginning to worry that the regulatory relief bill could become a vehicle for amendments they don't like - including one limiting bank insurance powers.

However, Mr. Yingling pooh-poohed the straw man theory, saying that the credit union amendments, which would increase the industry's lending and depository powers, simply would be inappropriate in a regulatory reform bill.

"It's absurd," Mr. Yingling. "If this is turned into a powers bill, it is going to die."


House Banking Committee Chairman Jim Leach last week was the lucky recipient of a "Guenthergram" - a single-spaced, typed note sent via fax by Independent Bankers Association of America executive vice president Kenneth A. Guenther.

Mr. Guenther's missive was a plea to the Iowa Republican not to attach any insurance provisions to the regulatory reform bill, which House Banking's subcommittee on financial institutions is set to start work on today.

The trade group executive said that odds for enactment of the package of 80-odd regulatory relief provisions, a top priority of his members, could evaporate if any amendments rolling back bank insurance powers were added.

"Chairman Leach would be doing a grave disservice to community banking if he encumbered the reg relief bill with any complicated insurance issues," Mr. Guenther said.

Guenthergrams are legendary in this town's banking circles. The IBAA chief uses them to prod reporters and public officials alike when he thinks it necessary.

But Mr. Guenther isn't relying on a fax message alone in this case. His group intends to drive home the message when 100 community bankers roll into town this week to pay a visit to Capitol Hill. Besides their pursuit of a "clean" regulatory relief bill, they will be pressing lawmakers on the need to shore up the undercapitalized thrift insurance fund.

And the community bankers will tell members of Congress that attaching any insurance provisions to Glass-Steagall legislation will turn the IBAA against the bill. The small-bank group currently takes a neutral stance on the measure.


Rep. John D. Dingell, ranking Democrat on the House Commerce Committee, summoned representatives of the securities and insurance industries last Friday to gather their concerns over Glass-Steagall legislation.

Steve Judge from the Securities Industry Association and Paul Equale of the Independent Insurance Agents of America met with the Michigan lawmaker, as well as with Commerce Committee member Edward J. Markey, D-Mass., and senior staff members.

"Dingell has real problems with the bill, and wanted to see if any of the industries were similarly concerned," said one person at the meeting.

Rep. Dingell's main concerns focused on the exemptions banks have from functional regulation in the bill, such as the limited oversight the Securities and Exchange Commission has over bank-eligible securities.

According to someone else who was there, Rep. Dingell may offer amendments that would force banks to move all securities activities to a separately capitalized subsidiary.

However, a Commerce Committee staffer said, "All Democratic amendments will fail" because Commerce Chairman Thomas J. Bliley, R-Va., has a majority of Commerce Republicans backing his push to report the Glass- Steagall legislation out of committee without amendments.

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