the Senate and House banking committees begin meeting today to strike a deal on the massive budget package. House Banking Chairman Jim Leach will be joined in negotiations by fellow committee Republicans Bill McCollum of Florida and Marge Roukema of New Jersey. The Democratic conferees are Henry B. Gonzalez of Texas and John J. LaFalce of New York. The Senate has not officially selected its representatives, but industry lobbyists expect Senate Banking Chairman Alfonse M. D'Amato will be accompanied by fellow Republican Phil Gramm of Texas and the panel's ranking Democrat, Paul S. Sarbanes of Maryland. The banking conferees, like their counterparts from other committees, must reconcile their differences and submit their proposals to the House leadership by Nov. 10. Votes are scheduled in the House for Nov. 16 and in the Senate the following day. Sources said congressional leaders hope to submit the final budget plan to President Clinton by Nov. 21. Bank lobbyists say they are uncertain about the outcome of the banking conference. Tucked inside the budget bill is a formula for bailing out the ailing thrift insurance fund. Both versions would shore up the fund through an 85-basis-point fee on thrift deposits, raising $6 billion, and would make banks pay 75% of the $800 million annual interest due through 2017 on Financing Corp. bonds. The House plan also calls for a merger of the thrift and bank insurance funds and the elimination of the thrift charter. The Senate version puts off a merger of the funds until charter issues are resolved.
*** Nearly every state banking trade group signed a letter opposing Rep. Leach's Glass-Steagall/regulatory relief bill. The state groups said the five-year freeze on the Comptroller of the Currency's ability to expand bank insurance powers was too much. The only state associations to abstain were Iowa (Rep. Leach's home state), Rhode Island, and Mississippi. Fleet Financial Group, an ardent supporter of the Glass-Steagall bill, is based in Rhode Island. Mississippi Bankers Association McKinley W. Deaver said his group didn't sign on because the members are divided on the legislation. The Independent Bankers Association of America, which remains in Rep. Leach's corner, is distressed over the rift with the banking industry's first powerful Capitol Hill ally in years. Summing up the frustration was John Shivers, chairman of the Independent Bankers: "Chairman Leach is the only chairman in years who is even semi-friendly to the banking industry."
*** Though banking industry executives say they're distressed at the prospect of opposing a friendly congressional leader, industry lobbyists say much of the blame lies with Rep. Leach himself. Rep. Leach underestimated the ability of insurance interests to influence his banking legislation, didn't fight hard enough to protect his bill from meddling House leaders, and has refused to say die by pursuing last-ditch efforts to save his Glass-Steagall/regulatory relief bill, according to lobbyists. The chairman's travails prompted one thrift industry lobbyist to call him "the Les Aspin of the banking world." The lobbyist called Rep. Leach educated, knowledgeable, witty, and honorable, but added: "Don't let him manage anything."