Tension is high as House lawmakers and lobbyists cut deals before Thursday's vote on financial reform, prompting even the normally cool- headed Rep. Jim Leach to blow his top.

The House Banking Committee chairman last week accused Robert A. Rusbuldt, executive vice president of the Independent Insurance Agents of America, of demanding too much and having lost perspective.

"Four years ago I introduced and passed out of the Banking Committee a bare-bones repeal of Glass-Steagall," Rep. Leach wrote in a biting June 23 letter. "You then went over my head to object to Speaker (Newt) Gingrich. That bill, which was insurance-neutral, would ... have easily passed the House and would by comparison look quite good to your membership today."

Instead, Rep. Leach said, insurance agents have lost ground to the banking industry, and now Mr. Rusbuldt is reneging on a deal reached last year.

"You are now attempting to renegotiate at the last minute," Rep. Leach said, noting that he had nevertheless asked American Bankers Association chief lobbyist Edward L. Yingling to consider some of Mr. Rusbuldt's demands. "Ed's response (curses aside) was that he would lose his job if he backed off any of the agreements."

In the end, Rep. Leach acknowledged, House Republican leaders forced him to offer concessions to the agents.

Mr. Rusbuldt's response? "I loved it," he said, insisting that he and Rep. Leach remain friends. "I'll probably get a huge bonus for it. ... Those are the kinds of letters that lobbyists like to hang on the wall. I've got about five of those letters from Jim Leach."

Negotiators last week quietly axed the cap on the number of uninsured, wholesale financial institutions that could be formed under the reform bill, pleasing New York's acting Superintendent of Banks Elizabeth McCaul and other supporters of the so-called "woofies."

The House Banking bill would have permitted only five state-chartered and five nationally chartered woofies. But Ms. McCaul, who is spearheading a New York State reform plan that would rely on woofie charters as its centerpiece, lobbied against the limits.

"We do anticipate the demand to create such institutions would quickly exceed the present state charter limitation of five, given the preponderance of financial institutions located in this state and several other states," Ms. McCaul wrote in a letter to Rep. Leach.

But interest in woofies appears to be waning. Maine, Tennessee, and Connecticut are the only states to enact legislation creating them. Only Maine, which allowed woofies two years ago, has chartered such an institution so far.

Late Tuesday, America's Community Bankers planned a conference call with its 36-member government affairs committee to decide the group's position on the thrift provisions in the compromise financial reform bill.

President Paul A. Schosberg said the group does not flatly object to letting the Federal Reserve Board decide whether a commercial company may buy a unitary thrift. But he said the bill may give the Fed too much authority.

J. Caleb Boggs 3d, a banking lobbyist for Butera & Andrews, has been hired by the Washington office of the Blank, Rome, Comisky & McCauley law firm, which is expanding its government relations shop.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.