Private air carriers have hired a big-name lobbying firm to convince lawmakers that the Federal Reserve unfairly subsidizes the aircraft fleet it uses to ferry checks around the country. The Association of Bank Couriers, a trade group of companies that compete with the Fed in transporting canceled checks, argues that the central bank is undercutting their prices and should be stopped.
To help make its case on Capitol Hill, the group has hired Vorys, Sater, Seymour, and Pease, a Cincinnati-based law firm whose Washington lobbying clients include Bob Evans Farms Inc., Honda North America, and Wendy's International.
The bank couriers are pressing lawmakers for legislation that would force the Fed to charge banks fees that are high enough to cover its transit costs. "The subsidies are a real disadvantage to private couriers," said Randal C. Teague, a partner at Vorys Sater.
The group already has some allies: Key Democratic lawmakers last year called for a congressional review of the Fed's check transportation operation. Republicans are taking a look as well. Delaware Rep. Michael Castle, chairman of House Banking's monetary policy subcommittee, is expected to examine the transit services when it holds hearings on the Fed's operations in late May.
Henry Gonzalez of Texas, House Banking's ranking Democrat, has been calling for hearings since January 1996-when he complained that the Fed "routinely violates laws" designed to promote competition.
Sens. Byron Dorgan, D-N.D., and Harry Reid, D-Nev., also have been frequent critics of the central bank and want Congress to investigate the 50% rise in Fed operating expenses between 1988 and 1994.
Credit card giant First USA Inc. has hired Canfield & Associates to convince Congress to preserve the thrift charter. With lawmakers considering a merger of the bank and thrift charters, First USA is edgy that any rollback of powers would upset plans for its Wilmington, Del.- based thrift, which was established last May. First USA Federal Savings Bank has been offering mortgages and installment loans, and plans to add auto and home equity loans, debit cards, and other financial products, according to the company.
By lobbying for a strong thrift charter, First USA joins another leading banking company-Citicorp-in protecting what one lobbyist called the "consumer bank charter of the 21st century."
According to federal lobbying disclosure records, other Canfield clients include the Consumer Mortgage Coalition, GE Capital Mortgage Corp., and Mutual of Omaha. Anne Canfield is the firm's president.
Does the American Bankers Association want to know what its members think about financial modernization? The latest member survey asks bankers to help set ABA lobbying priorities by ranking pending issues by importance. Absent from the list: sweeping financial reform that would allow mergers between banks and nonfinancial firms.
Instead, the broad industry restructuring is blandly referred to as "new products and services." ... The Indiana Bankers Association, stung by the decision of home state Rep. Dan Burton to co-sponsor legislation expanding the credit unions' membership base, urged members to pressure the rest of the state's delegation to oppose the bill. Bankers must "counterattack" by writing Congress about "real-life" examples of unfair competition from large credit unions, according to a IBA letter the state banking group sent to members last week.