Washington is a strange place. After months of debate over legislation to revamp financial services laws, opponents are softening and supporters are souring.
Take for example the American Bankers Association. It has consistently opposed the bill, but this morning its top executives, led by president William T. McConnell, are scheduled to discuss the bill's future with House Republican leaders.
Expected to attend the powwow are Speaker Newt Gingrich, Majority Leader Richard K. Armey, Majority Whip Thomas D. DeLay, and House Republican Conference Chairman John A. Boehner.
The bankers want to be assured that the House would accept any pro-bank changes the Senate might make to the financial reform bill. (The House approved its version of the bill by a single vote May 13.)
Though last Thursday the Senate Banking Committee abruptly postponed its vote on the legislation, bankers expect favorable changes regarding bank insurance sales, mandatory low-cost accounts, unitary thrift limits, and access to Federal Home Loan banks.
Such victories would be meaningless if the House negotiators stripped the provisions in a conference committee, Bankers Roundtable president Richard M. Kovacevich told Senate Banking Chairman Alfonse M. D'Amato in a Sept. 1 letter.
For Bankers Roundtable members to push for a bill in the Senate, leaders must agree "that a package developed in the Senate will be the final version of legislation," wrote Mr. Kovacevich, who is also chairman and chief executive of Norwest Corp.
While bankers are warming to the bill, insurance agents are cooling. Observers are watching closely to see whether the pro-bank changes will drive the insurance agent lobby to ally with the Treasury Department and increasingly restless consumer groups against the bill.
"We were the biggest supporters of financial services legislation the last few years," remarked Robert A. Rusbuldt, executive vice president of the Independent Insurance Agents of America. "Now we have a proposal that we can't support-figure that one out."
The agent's group has not actually made a decision because Senate Banking has still not released a final draft, but the signs are ominous, he said.
One banking lobbyist said the agents are merely posturing, and are sure to remain supportive of the bill. If they really opposed the bill's new insurance provisions, he said, agents would be swarming to the Hill in protest.
Mr. Rusbuldt disagreed, saying some of his state associations are furious with the proposals. "Anybody who says we are not that upset with this language doesn't know what they are talking about."
September will be a busy month for lobbying. The Bankers Roundtable's fall conference is set for Sept. 17-18 when members will be meeting with senators, said Alfred M. Pollard, senior legislative affairs director. Meanwhile the ABA's government relations council begins a two-day meeting here today.
About 30 executives who belong to the Securities Industry Association will lobby senators today and Thursday, a spokeswoman for the group said.
Some groups are holding off flying in their members until Senate Banking's next move becomes clearer. But an American Insurance Association spokesman said staff lobbyists "will be putting on a full-court press to urge the committee to get this problem worked out."