Rep. Richard Baker, R-La., suffered instant rejection June 20 when he asked House Banking Committee colleagues to limit federal deposit insurance as part of a financial reform bill.
His plan would have reduced insurance coverage to $100,000 per individual at banks affiliated with insurance, securities, or nonfinancial firms. Currently, a depositor may have numerous accounts at a bank, each insured up to $100,000.
Rep. Baker, who wants to remove all barriers separating banks and other businesses, argued that deposit insurance must be restricted to protect taxpayers.
But his idea was quickly shot down by other lawmakers.
"This would be extraordinarily upsetting to the economy," said committee Chairman Jim Leach. "Rumors of this getting out could be destabilizing."
Rep. John LaFalce, D-N.Y., said he was "sympathetic" to Rep. Baker's view but that bank customers are "not ready" for the idea.
Facing certain defeat, Rep. Baker withdrew his proposal without a vote.
The Clinton administration is casting a wide net in its search for a chairman of the Federal Deposit Insurance Corp.
Timothy R. McTaggart, banking commissioner of Delaware, said Treasury officials interviewed him for the post in early June. "I have indicated I would be interested in the position," he said last week. Mr. McTaggart, 37, worked for the Senate Banking Committee from 1991 to 1994.
Another name that surfaced last week was Lawrence Connell, former chairman of the National Credit Union Administration and now president of Atlantic Bank in Portland, Maine.
Mr. Connell said he wasn't interested the last time the job was open because he had just begun a turnaround job at Atlantic. He's available now; Atlantic's parent company announced Tuesday that it is being bought by Peoples Heritage Financial Group, also of Portland. The deal is scheduled to close in October, and Mr. Connell does not plan to stay on.
Mr. Connell, who is also vice chairman of the Shadow Financial Regulatory Committee, declined to comment on whether he has talked with Treasury officials or is interested in being FDIC chairman.
Previously mentioned candidates for the post are agency staffer Leslie A. Woolley and Jonathan L. Fiechter, former director of the Office of Thrift Supervision who now works at the World Bank.
Texas Banking Commissioner Catherine A. Ghiglieri met with White House and Treasury officials last Tuesday for separate interviews.
She has bipartisan support from Texas legislators such as the Republican senators, Kay Bailey Hutchison and Phil Gramm, and Democratic congressmen, Henry B. Gonzalez, Ken Bentsen, and Lloyd Doggett.
House Banking Committee Chairman James A. Leach, R-Iowa, wrote Treasury Secretary Robert E. Rubin on June 20 that "Ms. Ghiglieri would be considered the kind of Democratic appointment that would not raise partisan shackles."
The banking industry is maintaining its dominance of the Exchequer Club, a Washington-based group of financial industry professionals.
John C. Dugan, a partner in the Washington law firm of Covington & Burling who represents banks, has taken the club's helm from Diane Casey, national director of regulatory issues at Grant Thornton.
Bankers Roundtable general counsel Richard M. Whiting, American Bankers Association lobbyist Beth L. Climo, and America's Community Bankers legislative counsel Stephen J. Verdier are, respectively, vice chancellor, recorder, and bursar. American Council of Life Insurance general counsel Gary E. Hughes rounds out the club's officers as director at large.
The National Association of Mortgage Brokers named Rep. Robert L. Ehrlich Jr. its "legislator of the year" last week.
The association chose the Maryland Republican for his support of mortgage brokers, especially his sponsorship of the Respa Class Action Relief Act of 1997. The bill would freeze class action lawsuits against the industry, which the association said stem from the Department of Housing and Urban Development's unwillingness to clarify the legality of certain lender-paid fees.
"I am pleased and honored that NAMB has selected me for this prestigious award," Rep. Ehrlich said. Mortgage brokers "should be rewarded for the valuable service they perform for homebuyers-not jeopardized by bureaucratic inaction."
