Rep. Jim Leach was a surprise guest at the Kansas Bankers Association's annual Washington dinner last week. Room was hastily cleared for the House Banking Committee chairman, and after the tiramisu with chocolate and vanilla bean coulis had been consumed, former Rep. Dick Nichols stood to introduce Rep. Leach. Before the Iowa Republican could speak, however, the 150 diners gave him a standing ovation-a curious greeting considering most of the bankers in the room opposed his committee's financial modernization legislation. Rep. Leach urged the bankers to support the measure, noting that changes had been made to the Federal Home Loan Bank System to supply more credit to community bankers. "This is of stunning, stunning significance," he said. Rep. Leach reiterated his opposition to combining banking and commerce but noted that he hopes to kill those provisions when the bill reaches the House floor. The dinner attracted both senators from Kansas and the state's four representatives. Sen. Pat Roberts, who gave up a senior post in the House to run for the Senate, got the most laughs. Gibing at the bankers for fawning over Rep. Leach, Sen. Roberts quipped: "I'm a little tired of sucking up to Jim Leach. I used to be a chairman. I used to get standing ovations." The bankers jumped to their feet and began cheering Sen. Roberts. Later, Rep. Leach paid Sen. Roberts back, telling the bankers, "If he had stayed in the House, he'd probably be the Speaker." The dinner was the last arranged by KBA executive vice president Harold Stones, who is retiring at the end of the month after 30 years with the group. Widely considering one of the best state executives, Mr. Stones has been saying good-bye since 1992 when he announced his retirement date. The final farewell party is slated for Aug. 15 at the Broadmoor Hotel in Colorado Springs. That's when Jim Maag, who joined KBA in 1980, will take over. The energetic Mr. Stones is not expected to remain idle long. In fact, he may be going to work for Sen. Roberts. "Quite frankly, I would not be in the U.S. Senate without Harold Stones," Sen. Roberts said. "I have never had such a loyal and dedicated friend." That led to the evening's third standing ovation-this for Mr. Stones, who was finance chairman of Sen. Roberts' last campaign. Sen. Roberts hinted the two would work together again, saying he would have a "special announcement in September." u Sen. Robert F. Bennett, R-Utah, poked fun at credit unions during a Senate Banking subcommittee hearing last week while questioning the industry's regulator, Norman E. D'Amours. "Mr. D'Amours, you probably oversee the smallest of the various institutions," the Utah Republican said. "At least that's what they tell me when they come lobbying me about how small, and mom and pop, and innocuous every single credit union is compared to 'the big predatory banks.'" After a pregnant pause, he said: "I probably shouldn't have said that." "It is very accurate," the National Credit Union Administration chairman responded without missing a beat. u Rep. Maurice D. Hinchey, D-N.Y., briefly stirred reporters at a dull House Banking Committee hearing last week when he accused a Federal Reserve bank of making questionable loans to some employees. According to Rep. Hinchey, the Federal Reserve Bank of St. Louis has, at least since the early 1990s, made interest-free, unsecured loans to employees who were being relocated. These loans, ostensibly for moving expenses, are based on employees' unappraised home values, he said, and "in some instances they don't seem to have been paid back at all." Internal Fed reports, leaked to him and to fellow committee member and Fed basher Rep. Henry B. Gonzalez, D-Tex., "raise serious and troubling questions about the internal operations of the Federal Reserve," Rep. Hinchey said. At the hearing, Rep. Hinchey said he and Rep. Gonzalez would write to the Fed early this week demanding documents for additional investigation. St. Louis Fed officials were dumbfounded. "I'm not sure what the basis of the allegations are," St. Louis Fed President Thomas C. Melzer said. "I'm sure any loans that would have been made would have been repaid." After a brief investigation, St. Louis Fed officials found that from 1987 to 1993 five employees had gotten $112,500 in interest-free relocation loans. All were repaid. A bank official noted that employees who were relocated during that period had difficulty selling their homes in the uncommonly weak housing market.
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